Cingular Debuts Cellular Music Service - InformationWeek

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Cingular Debuts Cellular Music Service

Cingular Music offers mobile phone subscribers the option of downloading tunes from Yahoo or Napster.

Cingular Wireless on Thursday launched a cellular music service that it says surpasses offerings from other carriers in its support of online subscription services.

Cingular Music offers mobile phone subscribers the option of downloading music from "all you can eat" music services from Yahoo and Napster. Cingular also has partnerships with online store eMusic, which is owned by Dimensional Associates and is second to Apple's iTunes store in number of tracks sold.

Cingular "is more progressive in trying to be open in the formats they support, and in trying to draw users to their service," Chris Ambrosio, analyst for Strategy Analytics, said. "I like what Cingular is doing."

The success of Apple Computer Inc.'s iPod, which accounts for three quarters of the portable music players sold, has driven handset manufacturers to ship an increasing number of phones that can play music downloaded from a computer or the network. The iPod has also brought Microsoft into the market. The company plans to introduce its iPod competitor Zune this month.

The number of music phones sold in the U.S. this year is expected to top 45 million units, compared to 20 million last year, according to Strategy Analytics. Next year, the researcher predicts, 100 million units will be sold.

Having the phones, however, does not necessarily mean users will take advantage of the music features. Actual usage has been low because of high prices and the incompatibility of the phones with other devices, including notebooks, Ambrosio said.

Verizon Wireless, for example, requires subscribers to pay $15 a month for its VCast data service, and then charges $1.99 for each track downloaded. In comparison, online music stores for downloading to a computer charge 99 cents a track.

"Operators can't make any money on a price that low," Ambrosio said.

In addition, due to copyright protection embedded in the music files, songs downloaded to a phone often can't be played on other portable devices, or even a consumer's notebook, depending on the software used.

Cingular, however, is looking to boost usage through its partnerships with Yahoo, Napster, and eMusic, as well as one with XM Satellite Radio. With Yahoo and Napster, subscribers can pay $11.99 a month or $14.95 a month, respectively, to download all the music they want to their phones. Users, however, don't own the music, and can only play the tunes as long as they pay the monthly fee.

EMusic, on the other hand, charges a monthly fee for downloading songs to own. The price depends on the number of tunes subscribers want to download a month.

In teaming up with XM, Cingular--a joint venture between AT&T Inc. and BellSouth Corp.--is offering subscribers access to audio streams of 25 commercial-free music channels for $8.99 a month. The service is scheduled to launch Nov. 6.

Cingular is initially offering five phones that would access its music portfolio: The Cingular SYNC by Samsung, the LG Electronics CU500, the Sony Ericsson W810i, the Sony Ericsson W300i, and the Cingular 3125. The phones support the Windows Media and MP3 file formats, which means tunes stored on a PC can be transferred to the mobile devices via a cable.

Assuming that carriers can get their prices down, Cingular and rivals have a chance of competing successfully against the low-end iPod and other devices that play only music, Ambrosio said. Such players are popular with the casual listener, who, in terms of numbers, is the largest portion of the market.

"I'm actually bullish on the mass-market users," he said.

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