Asia leads mobile phone music revolution

Music sales growing faster than handset market.

Asia's mobile phone users could be spending more than US$9 billion a year on ring-tones and music for their phones by 2010, research firm In-Stat predicts. 

China and India will drive the growth, but Japan will continue to be the region's largest single market for mobile music, according to analyst forecasts.

New phone technology is expected to shape the growing market. "The availability of 3G network capacity and music-friendly feature phones will drive enhanced adoption of these services," said Frost & Sullivan industry manager Pranab Mookken. 

Bryan Wang, managing director of In-Stat's office in Singapore, added: "It is ring-tones that have been the primary driver for mobile music growth in the past, but this will change as new handsets equipped with digital music playback create a new market.

"As consumer preferences change, the future growth of the mobile music industry rests on ring-back tones and full music tracks."

In addition, more advanced music services will provide the impetus for mobile subscribers to upgrade to newer technology.

"Digital music is expected to fuel growth of the mobile market and provide 3G services with a much needed impetus," said Mooken.

Companies selling mobile music in Asia will see regional revenue leap from US$3.3 billion last year to US$9.3 billion by 2010, In-Stat predicts. The firm includes ring-tones, full music tracks and ring-back tones in its definition of mobile music.

Asia will become the world's largest market for mobile music by 2011 with some 40 percent of global sales, according to research firm Juniper Research.  

However Juniper's figures suggest less rapid growth than In-Stat's data. Juniper forecasts the global market to exceed US$14 billion by 2011, with Asia accounting for more than US$5.6 billion annually.

Market growth in South Korea, noted for its early adoption of 3G mobile phone technologies, has been so rapid that mobile music sales have already eclipsed conventional music distribution.

China, which is expected finally to roll out long-delayed 3G services next year, will be a key driver of mobile music sales growth in the region, recording US$2.8 billion in mobile music revenues by 2010. 

However, Japan will narrowly hang on to its position as market leader with US$3.4 billion in revenues in 2010, according to In-Stat predictions.

As mobile users become more sophisticated they will change the way they spend money on mobile music.

"As Japanese and South Korean users switch to true tones as their handsets become more advanced, we will see a shift of large ring-tone markets to India and China," said Wang.

True tones are short digitally recorded cover versions of popular songs used as ring-tones.

Some 60 percent of respondents to a recent In-Stat consumer survey indicated that they had a phone capable of some form of music playback.

But the researchers warned that, although Asia's consumers are extremely interested in music on their mobile phones, some are being deterred by high prices and file format compatibility problems.

In addition, piracy may be hitting sales. Industry participants are working to address these issues, the research firm believes.

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