Will Music On Phones Replace iPods?

Informa research forecasts that the market for mobile music will reach US$13 billion by 2011. But despite that growth, Informa cautions not to conclude that mobile music will “kill” the iPod. Informa believes that both formats will “continue to operate competitively side by side.” Well, we’re with them on one thing: We tend to dislike sensational headlines like “X Will Kill Y”, or “Z Is The Killer App“. However, it seems to me that this might be one of the cases where, given time, mobile phones with MP3 function will eventually replace dedicated devices like the iPod. It surely won’t happen soon, given the iPod’s awesome market strength, high quality UI, and acoustics, but eventually (1-2 yrs) people will have the choice to either carry two devices, or one reasonably-priced device that does both tasks very well. When that happens, they will choose the single device. Take the case of the PDA: it was a strong product which did valuable PIM functions, and we carried PDAs separately from our phones from around 1990 through the early 2000s. But the PIM functions were slowly integrated into many phones. Once Smartphones emerged that could do the PIM tasks well, the market for the dedicated devices went South. Analysts called it the death of the PDA…but the PDA didn’t die, it just consolidated into the one device that almost all demographics seem to carry all the time – the mobile phone. When the quality gap is breached (er…as in not the ROKR), and it’s phone vs. iPod head-to-head, my money is on the phone. That’s why many are expecting Apple to get into the phone business ASAP, or lose their edge. (Could Sony regain it’s lost mobile music laurels with the Walkman line of phones?) Apple has a choice: either evolve the iPOD to include a cellular radio and compete with phones with MP3 functions, or let the phone vendors take the market. I don’t think they’re that blind.

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