Mobile Entertainment Faces Issues

The ring tone business generated $217 million in revenue in 2004 for cell phone providers. Wireless operators, content providers and cell phone makers see huge opportunities in the addition of music and entertainment content, though business challenges loom as they try to create partnerships that will satisfy customers without eroding their existing markets. The new Rokr handset from Apple and Motorola allows users to download full-length songs from their iTunes libraries, though is restricted to hold only 100 songs even when ample memory is available for more — most likely an attempt by Apple to protect its iPod business. The Rokr phone also restricts songs downloaded into it from iTunes from being used as ring tones — likely imposed by Cingular to protect its lucrative ring tone deals. Rokr owners are also prevented from downloading songs directly from the iTunes Web site (they may access music only from the iTunes library on their PC) — likely due in part to Cingular’s plans to launch its own music download service next year (as will Verizon and Sprint).