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iPhone to "muddle the handset market"
Mobiles to look more like MP3 players in 2007

By Gemma Simpson

Published: Tuesday 21 November 2006

Apple's much-rumoured iPhone could shake up the mobile handset market next year - if it is actually released.

Either way, music-playing mobiles with high levels of storage capacity will become more mainstream during 2007, according to analyst house Informa Telecoms and Media.

Rumours are rife among Apple watchers about the next generation of iPod – a mobile phone/MP3 player hybrid dubbed the iPhone. The gossip mill on the iPhone has been turning for some time but, as yet, Apple hasn't felt the need to reveal any details of its plans.

David McQueen, principal analyst at Informa, said "iPhone could completely muddle up the handset market in 2007".

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McQueen said Apple has to warm operators to the iTunes ecosystem which the iPhone will plug into in order to produce revenue.

The iTunes-enabled Rokr phone entered the handset market in 2005, and was expected to be the forerunner to the iPhone, but experienced problems as Motorola, Apple and operators competed for revenue, McQueen said.

iPhones are now expected to enter the handset market in early 2007, he predicted.

Mobile entertainment is predicted to be big business for mobile operators, with Informa estimating it to be worth $23.1bn in 2007 and increasing to $38.1bn by 2011.

A stonking $8.76bn of the 2007 figure will be generated from the music sector.

Nick Lane, principal analyst at Informa, said the iPod has educated the user about digital music-file storage and has played a pivotal role in creating the 'sideloading' phenomenon that allows users to transfer music to their mobile from their PCs.

Mobile music has been the indisputable driver of the mobile entertainment market during 2006, a period which has seen the industry's reliance on ringtone revenues subside with the emergence of the full-track download, Lane added.