Multimedia Handsets: Exciting Capabilities Meet Dull Customer Demand

SUMMARY

While the growth of dedicated MP3 players has been receiving a lot of press, the number of wireless phones that are capable of playing digital music files is also gaining a significant amount of press. Likewise, wireless phones that can play real-time or recorded video are also on a steep rise. Together, wireless multimedia phones will grow from $8B globally today to over $13B in 2007. This growth is in spite of little or no growth in customer demand.

In-Stat surveyed users in North America and found that, in spite of substantial marketing efforts by the major carriers, customers' interest was universally flat from early 2005 to 2006

TABLE OF CONTENTS

• Executive Summary
• Methodology
• Introduction
• Multimedia Devices and Phones
  • Multimedia Device Industry
  • Challenges of Multimedia Capabilities in Wireless Phones
  • Multimedia Phone Market Scenarios
    • Traction for Walled Garden Approach
    • Simplified Exchange of Files
    • Acceptance of Unsubsidized Multimedia Phones
    • Multimedia Phones as a Market Footnote
  • Impact of Multimedia Phones on the Multimedia Market
  • Summary
• Survey Goal and Demographics
• Multimedia Phone Users
• Interest in Multimedia Formats
  • Multimedia Options
    • User Interest in Digital Music Playback Capability
    • Interest in Broadcast Audio Capability
    • Interest in Broadcast Video Capability
• Wireless Multimedia Business Issues
  • Willingness to Pay for a Multimedia Phone
  • Willingness to Pay for a Multimedia Services
  • Awareness of Their Carrier's Multimedia Offering
• Volume Forecast
• Conclusion

List of Tables

• Table 1. Global Sales of Dedicated MP3 Players (Units in Millions)
• Table 2. Global Sales of MP3 Players (Units in Millions)
• Table 3. Global Unit Sales of Portable CD Players, MP3 Players, and Wireless Phones (Units in Millions)
• Table 4. Global Unit Sales of MP3 Players Compared to Unit Sales of MP3 Phones (Units in Millions)
• Table 5. Global Unit Sales of Wireless Multimedia Phones (Units in Thousands)
• Table 6. Global Revenue from Wireless Multimedia Phones (US$ in Millions)

List of Figures

• Figure 1. Change in Interest About MP3 Phone Combination 2005 to 2006
• Figure 2. Interest in Multimedia Options by Wireless Users
• Figure 3. Unit Sales of MP3 Phones and MP3 Players (Units in Millions)
• Figure 4. Awareness of Portable Media Players
• Figure 5. Global Unit Sales of MP3 Players Compared to Unit Sales of MP3 Phones (Units in millions)
• Figure 6. Age of Respondents
• Figure 7. Income of Respondents
• Figure 8. Brand of Wireless Phone Used by Respondents
• Figure 9. Carriers Used by Respondents
• Figure 10. Expected Amount that Respondent Will Pay for Next Wireless Phone
• Figure 11. Multimedia Capabilities in Wireless Phones of Respondents
• Figure 12. Carriers Used by MP3 Phone Users
• Figure 13. Amount MP3 Phone Users and Non-MP3 Users Paid for Their Current Phone
• Figure 14. Amount MP3 Phone Users and Non-Users Would Pay for New Phone
• Figure 15. Importance of Storage Among MP3 Phone Users and Non-Users
• Figure 16. Interest in All Multimedia Formats
• igure 17. Cross Interest in FM and MP3
• Figure 18. Interest in MP3 Capability within Wireless Phone 2005 to 2006
• Figure 19. Age Ranges of Those Interested and Not Interested In an MP3 Phone
• Figure 20. Interest in FM Radio from Year to Year
• Figure 21. Interest in AM Radio from Year to Year
• Figure 22. Interest in Broadcast TV from 2005 to 2006
• Figure 23. Preferred Broadcast Types Among Respondents at Least Somewhat Interested in Receiving Broadcast Television
• Figure 24. Interest in Wireless VOD Among Respondents That Are At Least Somewhat Interested in Broadcast TV
• Figure 25. Willingness to Pay for New Wireless Phone
• Figure 26. Amount Respondents at Least Somewhat Interested In an MP3 Phone Would Be Willing to Pay Extra for this Capability Compared Year to Year
• Figure 27. Perceived Importance of Removable Storage Methods by Interest in MP3 Phone
• Figure 28. Prospective Customer Memory Expectation for MP3 Phones Year-to- Year Comparison
• Figure 29. Desired Methods for Download with Year-to-Year Comparison
• Figure 30. Interest in Brand for Next Phone by Multimedia Preference
• Figure 31. Preferred Method of Payment for Multimedia Files
• Figure 32. Perception of $15 Per Month Pricing for Video on Demand Among Respondents at Least Somewhat Interested in Receiving TV Broadcast
• Figure 33. Awareness by the Respondent of their Carrier's Multimedia Offering