Early adopters not enthused about multimedia handsets

May 11, 2005

The cellular phone industry's hype machine has been in high gear over innovative music- and TV-centric devices and services, but a new In-Stat report shows that some early-adopters are lukewarm about them. Fewer than 9% of respondents to an In-Stat early-adopter consumer survey were very or extremely interested in buying a cell phone capable of playing MP3 or other music files, and less than 11% were very or extremely interested in broadcast TV functionality, the high-tech research firm says.

Cell phone manufacturers, carriers and content providers face serious challenges in convincing these end-users of the benefits of music- or video-centric phones. 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-Stat also found the following:

- Only in the past year or so have smartphones started to build a significant market, after several years of hits and misses. A similar road is likely ahead for multimedia cell phones.

- Some mobile programming is quite clear: news and weather are winners.

- Payment schemes need more flexibility, however.

This Market Alert is drawn from the In-Stat report, "Warning: Early-Adopters Have Lukewarm Response to Multimedia Handsets" which covers research showing what end-users think about: TV on cell phones, storage capacity for music and video files, payment schemes, and video content preferences. In addition, the report includes worldwide shipment forecasts, discussion of some of the latest handsets, and details on the looming battle between DVB-H proponents and Qualcomm's MediaFLO.