Already a Bloomberg.com user?
Sign in with the same account.
As of July, AT&T Wireless subscribers have been able turn their cell phones into mini-jukeboxes. How? By downloading from the Internet programs that enable their cell phones to use catchy tunes like Funkytown as ringtones. Cingular started offering a similar service in June at 99 cents per download. These initiatives from the third- and second-largest wireless carriers, respectively, may herald a new craze on U.S. shores -- personalized ringtones.
Cell-phone companies sure hope so. European kids have been buying ringtones for cell phones for several years. In Japan, teenagers download ringtones to their cell phones using the popular i-mode wireless service. Analysts say that wireless companies in Asia have made hundreds of millions of dollars by selling downloadable ring tones to cell users. In Israel, where two-thirds of the populace has gone wireless, Jerusalem's Bloomfield Science Museum recently offered a special 10-minute medley dubbed "Spring Cellphony," which featured familiar themes from Bach and Mozart. Over the past 18 months, 1.16 million Google searches contained the term "ringtones." On Lycos, searches for "ringtones" have increased sixfold over the past year. In one recent week, for example, roughly the same number of people went looking for "ringtones" as for "Chandra Levy" and "Disney."
TUNING UP. Will Americans get with this trend? Web sites such as yourmobile.com and ringtones.com already offer paid downloads of ringtones to the owners of certain Nokia cell phones. Since May 2000, VoiceStream, the country's sixth-largest carrier, has offered ringtones for $1 each, downloadable from the Internet.
Now the big guys in the U.S. are set to play along -- and they have dollar signs in their eyes. Aside from Cingular and AT&T, Sprint PCS, the No. 4 wireless player, also has plans to start selling ringtones. Visitors to SprintUser.com bulletin boards have posted numerous queries regarding ringtones. Only Verizon, the largest U.S. carrier, with 25% of the domestic cell-phone market, has no plans for a ringtone initiative.
What's the appeal? "People want to use something that tells...more about themselves," says Tom Deitrich, vice-president in charge of product development at cell-phone maker Ericsson. Forrester Research analyst Charles Golvin thinks that wisdom that rings true, especially with teens. "While the youngsters may not be able to buy a CD or a concert ticket, they can certainly afford [to spend] $1," Golvin says. Early adopters and gadget freaks represent another obvious target market.
RING IN THE NEW. Cingular execs think the ringtones will appeal to a wide audience, and do so for reasons other than mere novelty. For example, personalized ringtones could make it easier to know when it's your cell phone ringing, rather than someone else's sound-alike handset. To that end, Deborah Withington, an acoustics expert at University of Leeds in England, has developed a special sound that helps the human ear to quickly pinpoint the location of a ringing phone. Phone makers could weave the chuusssh sound, which ranges from 25 hertz to 20,000 hertz on the sound scale, into cell-phone ringtones. Withington claims that even people with impaired hearing can pick up the sound, as well as determine where it's coming from.
Aside from making phones more personalized and easier to find, the mere act of paying to download a catchy ringtone could help to pave the way for wider consumer acceptance of other mobile-commerce applications -- things like wireless bill-paying and credit-card transactions. They are "something [operators] probably need to do to get their feet wet in m-commerce," says Joe Manget, a vice-president at Boston Consulting Group. Further, Manget and others believe ringtones might get customers used to paying for content like cartoons and advanced wireless games.
The tunes' popularity has already affected cell-phone design. At the moment, only some Nokia models sold in the U.S. can handle ringtone downloads. But by 2002 most cell phones will have a second speaker, which will allow users to listen to music rather than a series of beeps, says Ericsson's Deitrich. The extra speaker will also allow users to compose their own ringtone tunes, taking customization to a new level. Already, some phones and PDAs (personal digital assistants), such as the Ericsson R380, come with digital keyboards, so users can compose their own ringtones.
A MELODY THAT LINGERS? Some operators in Asia charge $5 a month for a daily ringtone download. (A new ringtone every 24 hours could increase cell-phone confusion, however, since a user might not know which that particular phone is programmed to play on any given day.). Other operators collect between $1 and $2 per individual sound bite. And the potential U.S. market is huge: "In the United States, there are more than 115 million wireless-phone users, and each one of them has a favorite song," says Adam Zawel, analyst with the technology consultancy The Yankee Group.
Not everyone is so sanguine about bagging cash for cell songs. According to Jupiter Research analyst Seamus McAteer, ringtone sales will only manage to hit $10 million in the U.S. over the next couple of years. "I don't think Americans are going to be willing to pay for it," says Peter Firstbrook, senior research analyst with technology consultancy META Group.
That said, cell-phone companies are bullish. Anyone for a few bars of Pink Floyd's Money? By Olga Kharif in New York