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The biggest U.S. mobile service companies are considering selling phones that can play songs and some have plans to deliver music to phones over the wireless airwaves, in a bid to boost revenue as phone call prices drop.
NEW YORK (Reuters) - Cell phones may become the new way for the iPod masses to download and listen to music in the coming years, but wireless companies may not see much of a boost to their profits from selling such services.
The biggest U.S. mobile service companies are considering selling phones that can play songs and some have plans to deliver music to phones over the wireless airwaves, in a bid to boost revenue as phone call prices drop.
Analysts expect Cingular Wireless, the biggest U.S. mobile service, to reveal plans on Wednesday to sell a new Motorola Inc. (MOT.N: Quote, Profile, Research) phone that comes with iTunes, the music store software from Apple Computer Inc.(AAPL.O: Quote, Profile, Research) , whose iPod player dominates the portable digital music market.
At least initially, Cingular is expected to let users transfer songs to the phone from computers rather than through wireless download services.
POOR PROFIT MARGINS FOR SONGS
Despite all the excitement about wireless song purchases, such mobile music is likely to deliver much poorer profit margins than wireless carriers are used to from phone calls or other services such as ringtones, one analyst said.
"There's very little room for profits from the full over-the-air download market," said Yankee Group analyst Linda Barrabee who believes music industry players could benefit most
from these new types of services.
The No. 2 and No. 3 U.S. mobile services Verizon Wireless (VZ.N: Quote, Profile, Research) (VOD.L: Quote, Profile, Research) , and Sprint Nextel Corp. (S.N: Quote, Profile, Research) have already said they are planning mobile music download services.
Pricing these services could require a tough balancing act between profitability and creating widespread demand since iTunes, Apple's high profile digital music service, charges only 99 cents a song, analysts said.
Sprint has said it believes wireless customers, which already pay as much as $3 for ringtones, will pay more for song downloads on-the-go than for downloads to their computer.
NEW YORK (Reuters) - Cell phones may become the new way for the iPod masses to download and listen to music in the coming years, but wireless companies may not see much of a boost to their profits from selling such services.
The biggest U.S. mobile service companies are considering selling phones that can play songs and some have plans to deliver music to phones over the wireless airwaves, in a bid to boost revenue as phone call prices drop.
Analysts expect Cingular Wireless, the biggest U.S. mobile service, to reveal plans on Wednesday to sell a new Motorola Inc. (MOT.N: Quote, Profile, Research) phone that comes with iTunes, the music store software from Apple Computer Inc.(AAPL.O: Quote, Profile, Research) , whose iPod player dominates the portable digital music market.
At least initially, Cingular is expected to let users transfer songs to the phone from computers rather than through wireless download services.
POOR PROFIT MARGINS FOR SONGS
Despite all the excitement about wireless song purchases, such mobile music is likely to deliver much poorer profit margins than wireless carriers are used to from phone calls or other services such as ringtones, one analyst said.
"There's very little room for profits from the full over-the-air download market," said Yankee Group analyst Linda Barrabee who believes music industry players could benefit most
from these new types of services.
The No. 2 and No. 3 U.S. mobile services Verizon Wireless (VZ.N: Quote, Profile, Research) (VOD.L: Quote, Profile, Research) , and Sprint Nextel Corp. (S.N: Quote, Profile, Research) have already said they are planning mobile music download services.
Pricing these services could require a tough balancing act between profitability and creating widespread demand since iTunes, Apple's high profile digital music service, charges only 99 cents a song, analysts said.
Sprint has said it believes wireless customers, which already pay as much as $3 for ringtones, will pay more for song downloads on-the-go than for downloads to their computer.
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