Music phones finally overtake iPods?

iPods sold at a brisk pace over the 2006 holiday season, which would seem to end the recent iPod sales slump. However, Tomi Ahonen aims to blow away any speculation that the iPod is still holding on to the music player throne. The barrage of evidence from Asian, European and UK studies he presents is pretty compelling. In a nutshell, he says that while iPod sales grew 45% that music phone growth has boomed to 243%, which means that though iPod sales are growing, the iPod market share has been long overtaken by music phones and is shrinking by comparison. (SonyEricsson alone shipped 60 million musicphones compared to Apple’s 46 million iPods).

Now, you’re thinking, “but just because people own a music-capable phone, a so called music phone, do people actually use them for listening/buying music?” Well, Ahonen says yes, and backs it up with some interesting European and Asian studies. The UK study he sites says that 80% of musicphone owners are satisfied or very satisfied with them. Thus Ahonen’s argument goes: the iPod is so totally over.

He’s quick to dismiss the iPod and usher in the music phone era, but I don’t think he’s really discussing the US side of the picture…

The iPod is the US standard for the portable digital music experience

Ahonen is right that US consumers, like their non-US counterparts, carry their phone everywhere. US consumers want to eliminate the multiple devices they carry and move solely to a music phone (or smartphone w/ music capability).

But the point Ahonen doesn’t discuss is that it’s not just about listening to music. It’s about carrying your entire music library with you all the time. That you can go for days without charging it. That you can DJ an evening with friends for hours with it. Those aspects of the iPod experience cannot be replicated with the current crop of music phones.

If the numbers are correct, 70% of US consumers will be weighing a new music phone against the high expectations of the iPod experience. This is precisely why the ROKR flopped. It was touted as a music device when it was merely a phone with MP3 capability. (The ROKR is not very much different from the Chocolate or the Sony Ericsson Walkman either.)

For music phones to succeed in the US they have to be extremely good at being a music player before people will be willing to give up the ease of use, the massive capacity and speed of syncing an iPod in exchange for a musicphone. Merely enabling MP3 capabilities and music downloads won’t convert them. This is not disputing the evidence mounting outside the US. I actually think it complements the differences in buying and listening behavior that he highlights. (The assertion is that Japanese and Korean consumers never adopted MP3 players but went straight to musicphones, which hit their market in 2003).

The bottom line is that if the Asian and European OEMs (and US carriers!) want to kill (or finish killing) the iPod in the US, they need to understand what it will take to convert the US market to music phones. The expectations are very high for portable digital music experience and current “music phones�? doesn’t come close. Here’s a rundown of musicphone shortcomings:

- Poor battery life when you actually listen to music (3 to 5 hours compared to an iPod’s 12 to 20).

- The inability to manage playlists from the handset. Even on the Sony Ericsson Walkman Ahonen touts, users cannot move or delete Cingular’s cutesy ringtone from the music folder. Maybe Sony Ericsson got it right in Korea and Japan, but I gave up thinking of my S710a as a musicphone after about a week because of this massive oversight in the user experience.

- Proprietary headphones. Here’s a great irony: I own 2 pairs of very nice (i.e. cost more than $50 USD) Sony brand headphones and neither of them works with my so-called music phone, also made by Sony. This isn’t only Sony’s problem, the same is true of nearly all the music phones.)

- Limited extendability. iPod users are used to carrying their entire music library with them. It plugs into any stereo, many automobiles, most radios and some TVs. This behavior is something musicphone users will miss, in part because carriers are more concerned about closing off their systems than they are interested in driving adoption by giving users what they want.

- Very limited storage capacity. The beauty of an iPod is the capacity and ability to store an entire music collection and take it with you anywhere (I’m talking about 20 to 40GB, not the 4 or 8GB iPhone).

- Slow. Over bluetooth it takes 15 to 20 minutes to sync 12 tracks to a music phone and I have to do that every time I want a fresh set of tracks. Contrast that with the 5 minutes it takes to sync 5GB over firewire.

Trying to convince me that the iPod is dying quickly outside the US is one thing. But I’m not convinced US consumers are eagerly giving up an iPod experience for current music phone offerings. Music phones have a long way to go, and I am welcoming the race.