Peter Kafka

Recent Posts by Peter Kafka

One More Thing: Buy iTunes Songs on Your iPhone Over the Air, Via 3G [UPDATED]

In addition to offering songs from iTunes without DRM restrictions, Apple plans on selling songs to iPhone users “over the air”–that is, you can buy them directly from your handset, from wherever you are. I’m told that Apple (AAPL) has struck deals with the major labels to start selling songs to iPhone 3G owners sometime this spring today. (Official press release out now).

Until now, iPhone owners have only been able to purchase music wirelessly when they’re on a Wi-Fi network, like the ones Starbucks provides free of charge to Apple’s customers. But the new deal means that anywhere you can get AT&T’s 3G signal, you’ll be able to buy a song.

It’s unclear whether All of the majors–EMI, Sony (SNE), Universal and Warner Music Group (WMG)–have signed on. CNET’s Greg Sandoval first reported the news (I may have to resort to Nancy Kerrigan Tanya Harding-like behavior when I see him at the Billboard Digital Music Live panel tomorrow in Las Vegas).

Also unclear: Pricing. The most intriguing news is that the songs will be priced at 99 cents a piece, just as conventional iTunes songs are. That’s a very pleasant surprise: The music labels and the wireless carriers have long been hopeful that consumers would be eager to buy music on their phones, and pay a premium for the privilege.

After all, the logic went, consumers will pay a couple bucks for a ringtone that only last a few a seconds: Surely they’ll pay extra to get an entire song delivered to their phone. That’s why carriers like Verizon (VZ) charge as much as $1.99 a song–double the standard price at iTunes.

While over-the-air downloads have been a big business in Asia and some parts of Europe, they have yet to catch on in the U.S., at any price. Sprint (S) cut its prices to 99 cents a song in the spring of 2007, when Apple first rolled out the iPhone; Verizon (VZ) still charges $1.99 a song.

But very few consumers are using their phones to buy music–or anything else beyond texting or making phone calls, according to survey released by NPD today:

While most U.S. consumers are aware of text messaging and the ability to change ringtones, the ‘Mobile Phone Usage Report’ revealed that just 34 percent of mobile phone users know that their current phone’s memory can be expanded, 28 percent know that they can watch videos, and 12 percent know they can access the Internet via Wi-Fi. Nearly a quarter (23 percent) were not sure if their phone included GPS, while a similar number (21 percent) were not sure if their handsets would play music.

The adoption of advanced handset features shows a gap between the usage of these features and the increasing sell through of devices supporting these features. According to NPD’s monthly Mobile Phone Track service from January through November 2008, 71 percent of all handsets purchased by consumers in the U.S. were capable of playing video, 60 percent had expandable memory, and 55 percent had GPS technology.”

That said, if anyone can make mobile music purchases mainstream, it will be Apple. This should be interesting.


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