June 27, 2005
'Bites Off the Apple' - Study
As more mobile companies add digital music downloading to their handsets, sales of iPods and other MP3 players will slow, according to an influential US newspaper, reports Netimperative.
"A report by the Barron's newspaper in the US said that by 2006, many new handsets will carry software and data storage for portable music, allowing users to download songs both from PCs and wireless music services owned by network operators or other companies.
"While optimists think Apple could sell 45 million iPods next year, mobile-phone makers will be selling more than 750 million handsets," wrote Bill Alpert in the report entitled 'Bites Off the Apple'.
"All those handsets could weigh on the iPod's growth prospects -- and Apple's premium stock valuation. Cellphone users won't need to lug around a second gadget to have their music."
The report added that Apple's marketshare of the digital music business could shrink from 90% to just a few percent.
Apple's dominance with the iPod will dwindle slowly however, as mobile phones will not have for some time the capacity to store as many songs as an iPod.
Furthermore, it will be some time before 3G networks will replace current networks in the US, the iPod's core market.
Barron's said that while some analysts think Apple may sell 45 million iPods next year, this contrasts with the 750 million or more mobile phone handsets predicted to sell next year globally.
At the end of the quarter ending 26th March, Apple sold 5.31 million iPods, accounting for roughly one-third of the company's revenue."
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