Multimedia handsets -- does anybody care?

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May 12, 2005

Despite the cell phone industry's considerable hype, consumers are showing something less than unbridled enthusiasm toward music- and video-centric mobile devices and services. That's the conclusion of a new report from high-tech market research firm In-Stat that examines the attitudes of "early-adopters."

In-Stat reports that fewer than nine percent of respondents in its early-adopter consumer survey were "very or extremely interested" in buying a cell phone that plays MP3 or other music files, while 11 percent showed interest in broadcast TV capability.

"Cell phone manufacturers, carriers, and content providers face serious challenges in convincing these end-users of the benefits of music- or video-centric phones," says Neil Strother, In-Stat analyst. "The survey did reveal some positives from respondents, however, including a willingness to spend a modest amount more for music or TV phones, and for additional storage."

In contrast to this dim view, a recent report from ABI Research contends that broadcast TV is the next "killer app for cellular handsets." But ABI's research examines the market potential whereas In-Stat looks at end-user response.

In-Stat's report suggests that multimedia phones may follow that same path as smartphones, which are only now gaining market traction after several of "hits and misses." Some mobile programming clearly makes sense, such as news and weather, but payment options need "more flexibility," according to In-Stat.

The In-Stat report, "Warning: Early-Adopters Have Lukewarm Response to Multimedia Handsets", is available now, priced at $2,995. It primarily examines end-user opinions about issues such as TV on cell phones, storage capacity for music and video files, payment schemes, and video content preferences. Also included are worldwide shipment forecasts, a look at some of the latest handsets, and a discussion of the two contending standards for handheld video broadcast, DVB-H and Qualcomm's MediaFLO.

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