iPhone May Not Rock Music Industry

Apple CEO Steve Jobs plays a Beatles Song from a Beatles album playing on iTunes as he introduces the new iPhone at the MacWorld in San Francisco, in this Jan. 9, 2007 file photo. The launch of Apple Inc.'s iPhone has stoked optimism on the part of music company executives that the handset will usher in a new wave of easier to use mobile music devices or even entice more music fans into embracing the vision of the phone as music player - and buy more music. But, analysts say, mobile music sales aren't likely to swell much on the coattails of the iPhone as long as users are limited to loading music via their PCs and are blocked from buying music wirelessly. (AP Photo/Paul Sakuma, file) (Paul Sakuma - AP)

In contrast, just under 1 percent of all wireless subscribers and nearly 6 percent of those with music-player phones downloaded music over-the-air in the same period, the firm said.

AT&T Inc. is the exclusive service provider for the iPhone. Its customers can download ringtones wirelessly but not music tracks. Subscribers with AT&T have the option to buy full-length tracks through their phones from digital music retailers such as Napster Inc., but the songs are downloaded to their PCs, not their phones.

Some analysts say iPhone will keep customers coming back to the iTunes store.

"Apple doesn't really believe, at least so far, in the model of purchasing music on the go," said Charles Golvin, principal mobile analyst for Forrester Research.

"The model that Apple has very steadfastly held to is that your PC or your Mac is the interface for browsing and discovering and purchasing content," he said.

Still, Golvin doesn't expect the iPhone to have much of an impact on iTunes sales.

"I imagine most of the people who'll buy the iPhone will be iPod users already," he said.

Some industry watchers say consumers haven't shown a clear preference for buying mobile music wirelessly.

"Most of the music on phones today is side-loaded," said Dan Cryan, digital music analyst for Screen Digest, a market research firm. "Over-the-air has not proved to be overly popular so far."

One reason is that wireless carriers have traditionally charged more for music downloaded directly to phones _ sometimes more than twice the usual 99-cent cost of a track bought using a computer.

Many early music phones have also had small screens, which make for cumbersome navigation through music store menus.

Apple spokeswoman Jennifer Bowcock declined to comment on the features of the iPhone, though the company has posted an online video that shows how the song library can be easily accessed by swiping a finger over the touch screen. In fact, nearly every aspect of the phone is controlled via the screen.