Double Brewing For Itunes As Verizon Launches Microsoft-Based Music Service

Strategy Analytics: That sales of digital music (online music plus mobile music and ring tones) within Western Europe and North America accounted for 13.9 percent of total consumer spending on music last year, Strategy Analytics projects that by 2010 more than $8.2 billion worth of music will be delivered via digital platforms in the same regions, accounting for almost 30 percent of total music sales.

Source: Strategy Analytics

Additionally, Apple's dominance of the online music space will come under increasing pressure as competitors target the shortcomings of Apple's iTunes Music Store (ITMS). As a strategy to bring it into mobile, Apple's partnership with Motorola has failed. Its lack of a subscription payment model as well as the fact that it is currently limited to iPod music players, will increasingly put Apple?? at a disadvantage to services such as V Cast Music. The speed with which sales of music player enabled mobile phones will overtake dedicated music players will accelerate this trend. (Figure 2).

global Mobile Phone Music Player Shipments Vs Dedicated Players

Source: Strategy Analytics

We believe that Apple's experience with Motorola rules out any quick launch of an iPod with built in cellular radio, and that Apple will continue to build resources towards bringing a wireless enabled product to market in 24 to 36 months. He further notes, As a result, Microsoft will gain strength as the most viable immediate alternative for manufacturers and service providers seeking to gain share for themselves.

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