The revolutionary Apple iPhone isn't just a threat to companies in the mobile industry, it also could be a potential threat to the $4.4 billion worldwide ringtone industry.
The Apple iPhone is not just a phone it is also a a widescreen iPod with touch controls so you will be able to store music on your phone very conveniently. Hmm, so you could then simply select your favorite song in iTunes and make it your ringtone!
So does it mean the death of the paid ringtone industry?
Ringtones have grown so popular that even Billboard tracks them and it's the one area of the music business where people appear to be willing to pay a premium price, an interesting twist in an era when many music lovers scoff at paying more than 99 cents to download a song from places like Apple's iTunes.
Ringtones, particularly master tones, which play actual sections from the studio version of a song, often cost between $2.50 and $3.50 to download.
Steve Jobs' iTunes Music Store showed foot-dragging record labels and freeloading music pirates that there is a third way and it is all set to spoil the party for the ringtone industry in a similar fashion.
Apple has couple of options with regards to offering the ringtone feature on its soon to be launched iPhone:
1. Customer focus: Apple could simply provide a feature where you can then select your favorite song in iTunes and make it your ringtone.
2. Increase its revenues: If Apple is hoping to get a portion of ringtone industry, Apple could probably sell the ringtones on their iTunes store at a much cheaper price then what the ringtone services offer today, as the ringtone is usually tiny snippet of a song and not the entire song.
So as you can see whichever option Apple decides to take, it might have serious implications on the ringtone industry and it is safe to say that the consumer will be the one to gain..
News & Rumors on this topic so far:
When Steve Jobs was asked after the Keynote address if the users will be able to use their songs as ringtones, he said "It's not been decided yet".
However, Actioncorp TV has posted a YouTube video in which they go over Steve Jobs' Macworld 2007 Keynote with a fine-toothed comb, revealing several "hidden details".
As per the video an image that was captured by someone from Engadget, revealed iTunes (for iPhone) ready to be sync even your ringtones. As can been seen from the image below you see tabs for different media types that you would sync to any iPod/iPhone device which also has the tab for Ringtones. This means that if Apple thinks it is necessary to include a tag necessary for ringtones then it expects you have a lot to choice from obviously by buying them from their iTunes music store.
Conclusion:
So if Apple goes with option 1 i.e. make it easy for you to use your favorite song as the ringtone, I don't think you will want to pay $1.99 for a low-quality re-sampling of a song or $ 2.50 for studio version of the song .
But from the "hidden features" video it seems like Apple might have already made up their mind and will not allowing users to use their songs as a ringtone. As Steve's ambiguous response seems to be only a smoke screen for Apple's bigger plans of selling ringtones via the iTunes music store. Apple could do to the ringtone industry what they did to the digital music download industry with attractive pricing.
My guess is the cost for a ringtone if Apple decides to sell it on iTunes would be anywhere between $0.29 to $0.49 as I don't think they will be able to justify selling ringtones which are snippets of a song which sells for $0.99 for more than the cost of the entire song.
Apple with ringtones via the iTunes music store would raise the bar substantially for the rest already in the ringtone business. The only good news for the ringtone industry currently is that ringtone offering on the iPhone will be only limited to the Apple iPhone.
However the ringtone industry needs to keep a close eye on this space as they will have to rethink their strategy to avoid becoming obsolete in the post iPhone era.
Unfortunately the only issue with allowing users to use their favorite song as ringtone is, as aptly put someone at Blackbeard "that also means that whenever the latest annoying song like “Who Let The Dogs Out” gets popular, it will be even easier for people to make it their ringtone. *sigh* I guess not every change is for the better."
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