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iPod's Cool Factor May Be Fading

iPod owners motivated to purchase because of status are more than twice as likely as the average iPod owner to switch brands when they purchase their next digital music players, one researcher says.
Apple sold about 6.5 million iPod units last quarter. But a question remains: can Apple maintain its grip on the market? Last week, cellular phone carrier Sprint Nextel and electronics giant Samsung said they would challenge Apple's iPod and music store iTunes. Sprint Nextel will offer music downloads through the Sprint Music Store, while Samsung will launch a cellular phone equipped with EV-DO, a technology that offers near-broadband speeds. The service lets the user to download the song to their cellular phone and computer.

Meanwhile, not to be boxed out of the cell phone frenzy, Apple and Motorola already offer the ROKR, a cellular phone that can play songs from iTunes, where consumers can find songs for 99 cents. These songs must be downloaded first to a computer and then transferred to the cellular phone. What Sprint and Samsung have going for them is few wireless telephone carriers offer the capability to download music directly to the cellular phone.

Napster LLC also in June reported an agreement with Ericsson to launch a mobile music service where users can download music either direct to a cellular phone or computer in Europe next year. The service will expand to the United States shortly after.

Some 75% of those who purchased an iPod for its “cool factor” are interested in owning a multimedia phone, and 36% would purchase a multimedia phone, the Diffusion Group survey said. About 59% of iPod owners are interested in owning a multimedia phone, and 26% are actually likely to purchase one, the survey said. Reports results are from a survey conducted online in August of more than 2,000 U.S. cellular phone users between the ages of 15 and 50. The random participants had to personally use a cellular phone, responded to questions about mobile media from portable media device ownership to online and digital music service subscriptions to preferred television networks and interest in access to these networks using a mobile phone.

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Cynthia Harvey, Freelance Journalist, InformationWeek
John Edwards, Technology Journalist & Author
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing