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This excerpt taken from the SIRI 8-K filed Mar 21, 2007. 5. Mobile Phones Mobile phones represent another significant and expanding means of enjoying audio entertainment. Approximately 75 percent of all Americans currently own a mobile phone,98 and the possibility of content delivery has not been lost on wireless carriers. Several carriers are offering their subscribers audio entertainment options today.99 For example, Sprint currently offers subscribers over 50 channels of radio and streaming video that Sprint subscribers can access on their device for a monthly fee and offers music download capabilities for a one-time fee.100 AT&T (formerly Cingular Wireless) provides numerous music-capable handsets and ___________________________________ 97 Research Firm Sees 73 Million iPod-Equipped Cars Worldwide by 2011, THE IPOD OBSERVER, Dec. 21, 2005, at http://www.ipodobserver.com/story/24805 (last visited Mar. 13, 2007) (projecting that by 2011, 28 million American cars will feature built-in iPod interfaces, and 60 million will include auxiliary input jacks that will accommodate iPods as well as other types of MP3 players). 98 Bridge Ratings, Industry Study: In-Car Media Use, Feb. 7, 2007, at http://www.bridgeratings.com/press_0207200-Media%20Incar.htm (last visited Mar. 17, 2007) (noting that approximately 75 percent of Americans owned a mobile phone in 2006). See also CTIA – The Wireless Association® Home Page, http://www.ctia.org (last visited Mar. 13, 2007) (estimating 233,336,423 current U.S. wireless subscribers). In terms of penetration, mobile phones are the third most popular electronic device, behind only televisions and radios. 99 A Pocket of Tunes, NEWSWEEK, Feb. 5, 2007, at http://www.msnbc.msn.com/id/16840023/wid/6448213/site/newsweek/ (last visited Mar. 17, 2007) (describing mobile music services provided or planned by Sprint, Verizon, and Cingular); see also Verizon Wireless Introduces V Cast Music, PRNEWSWIRE, Jan. 5, 2006, at http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/01-05-2006/0004243500&EDATE= (last visited Mar. 18, 2007) (describing Verizon’s V-Cast music service launched in January 2006, with one million songs available for download by mid-2006, and using the V-Cast network that covers more than 150 million Americans). 34 provides monthly subscription services that include streaming music, news, and sports, “making it possible for them to discover millions of new songs and take their favorites with them wherever they go.”101 Similarly, Verizon Wireless allows subscribers to wirelessly download over 1.5 million songs to their handsets via its V-Cast service.102 In addition, many non-carrier companies have deployed or plan to deploy similar radio and wireless download services.103 Subscribers are taking advantage of these offerings in dramatically growing numbers. Today, approximately 23.5 million wireless subscribers own phones with integrated music players.104 In addition, nearly 20 percent of the wireless phones purchased in the third quarter of ___________________________________ 101 Press Release, AT&T (f/k/a Cingular Wireless), Cingular Wireless Customers Can Now Enjoy Music Content from Napster, Yahoo! Music, XM Satellite Radio and eMusic, Nov. 2, 2006, at http://cingular.mediaroom.com/index.php?s=press_releases&item=1742 (last visited Mar. 18, 2007). 102 See Verizon Wireless Music Page, at http://getitnow.vzwshop.com/index.aspx?id=music_vcast (last visited Mar. 18, 2007). 103 For example, Motorola has deployed an iRadio service that allows subscribers to access over 400 commercial-free radio stations over their iRadio enabled mobile phone. See Press Release, Motorola, Inc., Motorola Rocks the House . . . and the Car . . . and the Mobile Phone . . . Rolls Out iRadio® Service, Jan. 3, 2006, at http://www.motorola.com/mediacenter/news/detail.jsp?globalObjectId=6260_6215_23 (last visited Mar. 18, 2007). 104 This is five times the number of Americans that owned such phones in 2005. Bridge Ratings, Music on Cell Phones, Jan. 25, 2007, at http://www.bridgeratings.com/press_01.25.2007 -MusicCellphones.htm (last visited Mar. 13, 2007). 35 2006 were music-capable.105 This demonstrated consumer interest in music-capable handsets likely will skyrocket in a matter of months when AT&T and Apple make the Apple iPhone available for sale.106 Wireless carriers are rapidly accelerating their provision of music and other content-based services. Indeed, the nation’s two largest cellular operators, AT&T and Verizon Wireless, have both announced their intentions to integrate Qualcomm’s MediaFLO chipsets into their handsets and to market MediaFLO services, which provide a multi-channel video and audio subscription service in the 20 largest markets in the country (with subsequent expansion to smaller markets planned in coming years).107 Wireless carriers have also invested billions of dollars to deploy their own advanced networks that allow for the provision of high-speed data services, such as music downloading and audio streaming. These next-generation systems offer unprecedented broadband coverage with enhanced data rates, reliability, and broadcast capabilities. In addition, wireless carriers recently invested almost $14 billion in additional ___________________________________ 106 See Press Release, Cingular, Apple Chooses Cingular as Exclusive U.S. Carrier for Its Revolutionary iPhone, Jan. 9, 2007, at http://cingular.mediaroom.com/index.php?s=press_releases&item=1813 (last visited Mar. 17, 2007). There is significant and ongoing convergence between satellite radio receivers, MP3 players, and mobile phones. The difference between mobile phones and portable music devices is blurring: a number of “music phones” have been released recently, including Apple’s iPhone, Verizon/LG’s Chocolate and many others. At the same time, satellite radio receivers have added MP3 playing capabilities, and mobile phones and MP3 players have started including AM/FM radios. 107 For example, Qualcomm is investing $800 million in building a network for MediaFLO, a broadband network offering mobile content via a wireless network that several wireless carriers plan to offer to their subscribers. Stephen Lawson, Cingular signs on for Qualcomm mobile TV, INFOWORLD, Feb. 13, 2007, at http://www.infoworld.com/article/07/02/13/ HNcingularmobiletv_1.html (last visited Mar. 15, 2007). 36 spectrum that they can use to deploy such services.108 Wireless carriers also spent more than $234 million promoting music phones and music download services in 2006 alone.109 Despite these substantial investments to date, wireless carriers and other entities will continue to invest in next-generation networks and spectrum so that they may provide consumers with even more advanced services.110 Such commitment both by service providers and equipment manufacturers underscores the vast potential for audio entertainment distribution via mobile phones. |
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