23.5 million US Mobile Subscribers Have Music-Capable Phones: Telephia

23.5 million mobile subscribers in the U.S. have phones with integrated music players, up five times from the same period in 2005 and nearly 20% of the new phones purchased in Q3 2006 were music capable, according to Telephia. 

Many of these subscribers report loading music on to their phones via their PC, but only a small number have actually downloaded music over the air (OTA) from a wireless carrier music store. In Q3 2006, a little over 2 million subscribers (about 8.5% of those with music-capable phones)  reported any purchases of music via OTA downloads.

Uptake of Music Phones and Over the Air Download Services ( U.S. )

 

Q3 2005

Q3 2006

Subscribers with music players on their handsets

4,603,688

23,495,033

As percent of all mobile subscribers

2.3%

10.5%

Subscribers who have downloaded full tracks over the air

NA

2,004,228

As percent of subscribers with music players on their handsets

NA

8.5%

Source: Telephia U.S. Device Census Report, (Q3, 2005-Q3, 2006)

 

The LG Chocolate (VX8500) has been one of the most heavily promoted music phones, but the five most popular models among recent purchasers are the Motorola RAZR (V3m and V3i), Motorola E815, LG VX8100, and Sony Ericsson Z525.

 

Sprint was the first major U.S. operator to launch its music store in October 2005, followed quickly by Verizon Wireless in January 2006. Subscribers on these carrier networks represent the majority of the two million OTA downloaders. 

 

Music phones and OTA music stores were the focus of much of the advertising spend from carriers during the holiday season. Of the more than $3.5 billion of carrier advertising dollars that was spent in 2006, $234.3 million or 6.7%, promoted music phones and music download services.

"It is still early days in the market for OTA music purchasing and carriers are experimenting with pricing models and working to improve the user experience," said Kevin Burden , Senior Manager—Mobile Devices, Telephia. "Clearly, the ability to facilitate impulse music purchasing will allow the wireless music stores to capture some portion of the larger digital music market – the only question is how big a piece they will get."

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