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)

As mobile phones become more sophisticated, the devices represent an increasingly tantalizing revenue opportunity for cash-hungry record labels and digital music retailers.

Early phones could only hold rudimentary monophonic ringtones _ simple jingle renditions of recorded songs. Now, phones that play CD-quality music, video and games are common.

As network speeds increase, Internet-capable phones are being used for a number of functions, including streaming radio and TV broadcasts and exchanging instant message with computer users. IPhone users will be able to wirelessly stream videos from YouTube.

As a mere portable music player, the iPhone has far less storage than many higher-end iPods or other standalone portable music players. A 4-gigabyte version costs $499, while an 8-gigabyte model costs $599.

Its bigger screen and touch-screen navigation are seen by many as a step in the right direction for the mobile phone industry, which has often been accused of churning out gadgets that are too cumbersome.

"They're still complicated to use in terms of accessing and downloading music," Bronfman said.

Another drawback is that the speed of wireless networks in the U.S. lags those in other parts of the world, such as Asia and Europe, he said.

At a wireless industry conference earlier this year, EMI Group PLC CEO Eric Nicoli said his company remains open to either the side-loading of tracks purchased online or direct, over-the-air music sales, among other business models.

"We'll try anything and everything, recognizing that the consumer will ultimately decide."