Survey: Cellphones To Bring Music To Consumers' Ears

PORT WASHINGTON, N.Y.— About 20 percent of consumers are interested in buying a cellular phone that doubles as an MP3 player, and 21 percent are interested in phones that double as headphone satellite radios, according to a survey from The NPD Group, based here.

Among teens, the interest in an MP3 phone is even higher, with 56 percent saying they're interested.

Suppliers of MP3 players, however, shouldn't be concerned that MP3 phones will cannibalize their sales, NPD contends. Only 14 percent of respondents said they would replace their MP3 player with a phone. Among users of higher capacity MP3 players, swapping a dedicated MP3 player for an MP3 phone is even less likely, the research company contended, because 75 percent of consumers expect phones to store a maximum of 100 songs.

When it comes to loading music onto the phones, more than half would prefer to transfer PC-stored music to their phone via a data cable, most likely because they already have so much music stored on their PC, NPD said. Nonetheless, 37 percent of consumers prefer to download music directly to their phones over the cellular network.

Pointing to the potential success for the Sprint PCS/Sirius Satellite Radio content deal, NPD found that 21 percent of consumers are interested in a satellite radio/cellphone hybrid.

Among consumers interested in an MP3 phone, 75 percent are willing to pay an average of $25 extra for the option, and they're willing pay more for over-the-air downloads than PC downloads. NPD contends the optimal price point for mobile music downloads is $1.75, compared to the usual 99 cents for authorized downloads to a PC.

"Mobile music is poised to be the breakout content category of 2006," said NPD wireless-research VP Clint Wheelock. "With a major emphasis and heavy promotion by wireless carriers, device manufacturers, and the music industry itself, you can bet that consumers will be hearing a lot about new music services, and NPD's research indicates that many of them are ready to listen."

The potential for music ringback tones and music ringtones is even greater, NPD said. Since last year, the number of ringtone purchasers almost doubled to 17 percent from 9 percent, and an additional 12 percent are interested in purchasing ringtones within the next year.

There are plenty of phones to play the ringtones, NPD added. A total of 61 percent of mobile phones currently have the capability to download a ringtone, making it the largest addressable base of any wireless data or multimedia service, the company said. By comparison, only 48 percent of those phones can download games. The number of teens with the ability to download ringtones is 75 percent compared to 59 percent of adults.

Ringback tones, or songs that callers hear instead of a dial tone when they call a cellphone, are of even greater interest to consumers, NPD also found. Among wireless subscribers, 25 percent say the service is of more interest then MP3 phones. It's also grabbed the attention of record labels and service providers, said Wheelock, because ringback tones reside on the network and involve far fewer digital-rights management issues.

NPD based its results on an Internet-based survey of a nationally balanced sample of teens (13-17) and adults (18+). NPD collected 8,261 total responses, of which 5,948 were current wireless subscribers.