iPods are out and mobiles with built-in music capability are the new thing, according to Nokia which reckons sales of MP3 phones far outstrip shipments of dedicated MP3 music players.

The Finnish manufacturer said in an interview with Reuters that it was selling “huge amounts” of MP3 phones and predicted it will sell around 80 million of the devices this year, up from 46.5 million in 2005.

The figures will make interesting reading for Apple which sold 8.7 million of its iPods in Q3, lagging well behind the total figure for MP3 phones. Although Apple is still by far the most popular dedicated player choice, MP3 phones are, according to Nokia, catching up. Tommi Mustonen, director at Nokia’s multimedia unit told Reuters that “the technology is completely ready, and the change in consumers’ habits has started”.

Paul Jackson, principal analyst at Forrester Research thinks Mustonen’s comments are “aggressive… but definitely not hot air”. He explained: “Yes it is true that Nokia may well have more music players than Apple at some point but it’s the classic single function versus multi-function device. Nokia may have more music players out there but it probably has more games players out there than Sony or Nintendo because all its phones have Snake built-in.”

Nokia is expected to launch its own online music store in 2007 and if the predictions are true Nokia will get a significant cut of the music downloads market which analyst Forrester predicts will grow an average 74 per cent every year.

Rebecca Jennings, senior analyst, consumer markets at Forrester Research said that while downloading tracks to mobiles direct is a dying fad, PC downloads – or sideloading – are looking healthy.

“While the overall music download market will be worth Eur3.9bn in 2011, just Eur700m will come from [downloads direct to] mobile phones,” she said.

In March, Anssi Vanjoki, head of multimedia at Nokia, said that the fate of players like Apple, in the music sector, would be the same as those in the camera industry: effectively destroyed by the assimilation of specialist technology into mobile handsets. At the time, Vanjoki pointed out that Nokia made 100 million cameraphones in 2005, making it the world’s largest camera manufacturer.

“In the next 6-12 months, there will be more of these announcements. The next to disappear will be the makers of music devices and then the manufacturers of video cameras,” Vanjoki said. Forrester’s Jackson dissagrees, asserting that Apple’s business is under no threat from Nokia… yet. “What Apple can’t let happen is for Nokia to create a device that is so compelling as a phone/music player that it competes with the iPod directly.”

Apple did not respond to phone calls.


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