This whole flap with RealNetworks’ “Harmony” technology isn’t about the music and the player, according to John Dvorak, “It’s about a scheme afoot to monopolize music delivered to cell phones. Although the online music business is expected to grow to $1.7 billion by 2009, few people realize that the dopey cell phone ringtone market is already past that with $2.3 billion worldwide sales in 2003 according to the Yankee Group.”
Dvorak writes, “Apple and Motorola are working on a deal to put iPod technology on Motorola cell phones. According to published reports, the hope is to create a cell phone/iPod sub-platform that can be licensed to other makers such as Nokia and Samsung. The idea is to develop a proprietary music delivery system with the phone carriers. This gives them a new opportunity to add additional fees to the already burgeoning cell phone bill, this one for music.”
“Billed as either a monthly service or pay-per-tune, everyone expects a bonanza. We already know that cell users will pay a dollar for a ring tone. They’ll pay a dollar for a catchy tune, too. The potential sales could dwarf the music business if the ringtone business is any indication of potential. You could even make these songs your ringtone. Currently any pop songs selling as a ringtone go for as much as $4 each,” Dvorak writes. “This grand scheme only works if the platform is secure. You can’t sell an iPod phone and lock in all this easy money if people can buy from just anyone or just use bootleg music, can you? So along comes the RealNetworks hack, which screws up this scheme. Suddenly the iPod looks a lot like any other MP3 player except for its good looks, and those go away when it’s in the phone.”
Full article with much more here.