"Daddy, Does the Music Come From Your Cell Phone?"

Driving my 6 year old daughter to an after school event, we were listening to music from my iPod through my car stereo. (Apple teamed with BMW to make a neat adapter cable that allows you to tuck away the iPod in the glove box and operate the player's functionality though the existing car stereo controls-- I love it). My daughter only cares about the music ( huge Beatles fan) and not the technology that makes it work. But as I pulled into the drive, turned off the ignition and grabbed my Treo cell phone, even she made the natural connection between the portability of the cell phone and the infinite enjoyment of being able to take your music with you EVERYWHERE.

She's not alone in her observation: A recent Consumer Mobility Study by In-Stat/MDR finds that 11.4% of US mobile subscribers are very or extremely interested in moving beyond basic ringtones and purchasing more full-featured music/audio services for their wireless phones including music and news/talk content available as downloadable content or on demand. The most popular service concept is the ability to download MP3s or other digital music files directly to wireless handsets, followed closely by the ability to listen to streaming music on demand.

Here are just a few of the activities underway that are helping to bring her vision to the market today:

Robust storage capacity is here: SanDisk says, in 2005, phone manufacturers will introduce 200 new phone models with memory card slots. Samsung Electronics has developed a cell phone that runs on Microsoft's Windows Mobile operating system and includes a 3GB hard drive. The drives in the Samsung phones are similar to those used in some portable digital music players, such as Apple Computer's iPod Mini, and the phone maker is employing them so that it can offer similar music player functions on the handsets.

Best of both worlds - Dual Track Download: Loudeye (NASDAQ: LOUD) in partnership with Nokia and O2 recently announced functionality for users that download a full track to their mobile device will simultaneously receive a “dual download” of the same track sent to their desktop optimized for playback on a PC or other portable device. This service will allow users to “synchronize their mobile music collection with their PC. Tracks optimized for transmission over mobile networks are typically in the 500 to 750K range which are considerably smaller than the average MP3 file which for a 4 minute track typically weighs in at 4-5MB.” (Excerpt from Loudeye company press release, 3/9/05)

P2P Goes Mobile: Using Melodeo’s peer-to-peer feature, (www.melodeo.com) users select a song from the play list of tracks on their mobile phone. They can then send the full track to another user with a Melodeo-enabled mobile phone located within Bluetooth range. The song file, which is DRM protected, pops up on the recipient’s mobile phone and he or she can listen to a 30 second preview of the song. If the person likes it, he or she can easily choose to purchase it and the Melodeo server then sends a decryption key via the carrier’s network to unlock the song, and bill the purchase to the recipient’s account. Melodeo has launched the service with tracks licensed exclusively from Warner Music. (Adapted from Melodeo press release, 2/10/05)