Which Will Win?

TWICE: Which type of converged device do you think offers the most sales potential? For example, cellphone/MP3 players, satellite radio/MP3 players, cellphones with navigation service?

Duea: The affordably priced music-enabled cellphone that can handle subscription content from Napster To Go and over-the-air content from Napster Mobile is the device with the most sales potential because it is a product that will be consumed by the masses.

First, music is something that appeals to most people, and most people can find many songs they like in a catalog of over 2.5 million songs. Second, most consumers will find a cutting edge, beautifully designed music-enabled cellphone attractive at a price of $49.99. Finally, Napster's carrier partners are investing in marketing campaigns to let consumers understand what they can do with Napster and their phone, and they are also working closely with Napster and their handset manufacturers to make the process of consuming music on the phone easy.

Carriers are providing consumers with phones that have more functionality at lower price points than stand-alone MP3 players due to subsidies and other marketing incentives. While some of the other functions that are being integrated into phones are interesting (such as navigation and TV), music-enabled cellphones that can handle subscription content from Napster To Go and over-the-air content from Napster Mobile at an affordable price offer the greatest sales potential.

Smith: Handheld navigation in a PMP makes a lot of sense. As the PMP becomes a standard Internet connection device, navigation is the natural application. This is something you can expect to see from Archos in the near future. Again, you need a larger screen size to use a navigation system, much as you need to watch a feature-length film. It just doesn't make practical sense to watch movies or view maps and directions on the small screen size required of a communications device.