I have been reading lots of items in recent months about how analysts and cell phone providers are convinced that mobile phones and the providers music download services will defeat the iPod. I believe that they are all completely wrong for a number or reasons. Number one is the greed of the music industry and the cell phone companies. Right now iTunes and other music download services charge $.99 a song. I personally think that this is already to high given that the product is already crippled by DRM and lower sound quality than a physical CD (I won’t even get into the fact that most of the stuff pushed by the major labels is complete crap, that is for another time). Considering that the distribution costs are vastly smaller for downloading than phycical distribution, the labels have absolutely no justification pushing for higher prices which apparently exactly what they are pushing apple to do. The phone companies are even worse, they apparently want to charge as much as $3 a song. I don’t even get why people would pay that much for a 30 second clip to use a ringtone, who in there right mind would pay that much for songs that you have to download over the slow cellular network (probably using up your minutes at the same time).

Now, how this all affects mobile is that there will be a huge tide of MP3 players from a number of different vendors coming into the market, in the form of music-enabled phones. So what’s going to happen when you’ve got all these different phones being billed by carriers as iPod killers or replacements and people come to find out their music won’t play on them, or they can only listen to music that’s been bought from one specific store or service? They’re going to get pissed off, that’s what’s going to happen. They won’t buy music that’s tied to a specific device or has onerous limitations on what they can do with it — which will probably rule out any carrier’s download store from being a success. Regardless of how the record labels see things, people want to own their music, and owning music means being able to do with it what you like, and play it on whatever device you want. This means that vendors that focus on syncing, rather than playing along with carriers’ dowload shop dreams, will be the winners. Few operators understand this, though, and their stranglehold on the retail channel means it’s going to be hard for manufacturers to succeed.

Worse still than this is the drm restrictions that want to put on the music. The phone companies don’t want us to listen to music that we already bought, they want us to buy it all over again. Apple and Motorola have been working on a mobile version of itunes to use on moto phones for over a year. Apparently it has been ready to go for quite some time. The problem is the phone companies wont sell it. The phone has apparently been configured so that users can take music they have already bought from itunes, and load it onto their phones just like they do on an ipod. This is unacceptable to the phone companies because they only want people to buy music from them. of course they don’t want you to transfer the songs so if you lose, break or upgrade your phone, you have to start all over again. So you get to pay a lot more for a lot less functionality. Of course their are other issues like the poor battery life of a fun that is playing music, the lousy user interface, etc. Well I don’t think people are that dumb. People want there phones to be good phones, and there music players to be good music players. Most importantly they don’t want to get ripped off by their phone company.

Record and phone companies have shown no signs yet of common sense when it comes to business pratices, so I am confident that the mobile music business will be a miserable failure.