Blog Post

Can Apple Reinvigorate The Ringtone Market?

Apple (NSDQ: AAPL) has changed the way consumers buy ringtones from the company, bringing into question whether the largest digital music-retailer in the U.S. can breathe new life into the ailing mobile content category.

Last week, Apple announced a flurry of news, most of which centered around the company’s holiday iPod line-up. But buried in the excitement was a small tidbit shared by CEO Steve Jobs that Apple will start selling ringtones directly on the phone for $1.29 each. Now, almost 30 million iPhone owners around the world will have access to the 30-second audio clips that can be downloaded directly to the phone. John Fletcher, an analyst with SNL Kagan, said it’s not an obvious game-changer, but “we’ll see what Apple does because they are defining music whether everyone likes it not.”

For sure, ringtones could use a boost. Last year, mobile music sales declined, marking the first time for any mobile content category. According to SNL Kagan’s research, ringtone sales shrank 24 percent to $541 million in 2008 from $714 million in 2007. Fletcher: “It