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I want my MP3: Could a wireless handset that includes an mp3 player be the latest winning device?

MP3 players are one of the last gadgets to hit the marketplace. However, how can carriers cash in on this hard-wired music application?

Manufacturers have found a way by producing MP3 handsets -- cellular phones that have MP3 players built in.

The technology behind MP3 is fairly simple. MP3 stands for MPEG1 Layer3, which means that the music file is made by compressed technology of audio data. Although a CD can store 15 CD music files, the same CD can store more than 150 copies of MP3 files.

Getting the music files from the computer to the phone to the also is an elementary process -- users connect the phones to computers to do the file transfers. Once the user downloads the music with the proper software (bundled with the handset/service), flash-memory technology is used. For example, Audiovox Communications uses a removable multimedia card inside the battery cavity of the CMP-3 phone. The multimedia card can store 16Mb, 32Mb and, ultimately, 64Mb of memory.

Even with the MP3 player included, the wireless handset still offers all of the features expected in today's competitive market. Samsung's MP3 handset, the Uproar, is capable of browsing the Web while listening to the digital music files or audio books.

What's Out There?

In 2000, Samsung was the first manufacturer to unveil an MP3 handset with its Uproar SPH-M100 PCS phone Samsung wanted to make sure several elements fit the package successfully.

According to Doug Stricklin, Samsung senior product line manager, the handset needed to have the best MP3 player, menu structure, user interface and feature capabilities. Memory also was important.

Uproar's built-in flash memory holds more than an hour of CD-quality music, heard through a headset remote that comes packaged with the phone.

Sprint PCS, which offers the Uproar handset, released the phone in November 2000 in conjunction with an online music service called My Music. According to Nancy Sherrer, Sprint PCS media relations manager, the phone and the online service do not have to be used together, but "it was a nice complement."

Until recently, Samsung was the lone ranger in the U.S. mobile MP3 market. Then, in August 2001, Audiovox released the CMP-3, a dual-mode CDMA handset with a built-in MP3 player and Web browser.

According to Tim Tansey, Audiovox Communications regional vice president, the company saw the appeal to two strong arenas -- music and connectability.

"We thought it made perfect sense to incorporate both," Tansey said.

He added that Verizon Wireless offers the CMP-3 handset through its sales channels, including RadioShack.

Although Samsung and Audiovox have gotten a running start, other manufacturers are not far behind.

Nokia recently announced the 5510, a handset that includes an MP3 player. This phone not only offers music with MP3 and FM radio, but it also includes games and advanced messaging capabilities. The downside: The handset is not yet available in the United States.

Who Wants It?

According to Webnoize, a new-media entertainment analyst company, 50 million consumers will use mobile devices to access streamed music and video content by 2006.

But who's presently using these MP3 handsets?

According to Sprint PCS' Sherrer, it's an integrated customer.

"No one is just a worker from 9 to 5 and then an average consumer from 5 to 9," Sherrer said. "A lot of people are trying to integrate their lifestyle into what they do during the day."

Jeff Hallock, Sprint PCS director of consumer marketing, added that youths also appreciate an integrated device that combines the phone, MP3 and online music store.

"Clearly, there are a couple of things that unify the youth market," said Hallock. "One of those is music."

Samsung's Stricklin agreed that the audience base primarily is the younger market, which is familiar with MP3 technology, but he said the mobile MP3 market isn't necessarily limited to them.

"You've got people 40 to 50 years old that use MP3 on their PCs, so we were trying to go into that mid-range market," Stricklin said.

The mid-range market also is more able to afford these handsets, which, Stricklin said, are more expensive than most, but if you combine the cost of a handset and an MP3, "it's comparable or actually better than buying two separate components."

Samsung's Upper retails for $199. Audiovox's CMP-3 retails for $299.

The Future Looks Bright

One downside to MP3 handsets is that users can't download music files directly from the Internet. Carriers must bundle the MP3 handsets with software. So when can the hard-wire service become wireless?

According to Stricklin, today's data speed of 14.4kb/s doesn't cut it. With existing technology at 14.4kb/s you're looking at roughly 40 to 44 minutes for a normal 4Mb file, and that's depending on what the average throughput is, he said.

"You would never download an MP3 file (wirelessly) these days," Stricklin said.

When you get into 1X speeds of up to 144kb/s, the download time decreases 10-fold. To download the same 4Mb file would average four minutes. Stricklin doubted that these faster speeds would make MP3 users want wireless-downloading capabilities.

However, MP3 users might get a kick out of fan-based music services, which makes them a potentially lucrative area for carriers. For a fee, hardcore fans could be alerted to a band's upcoming albums, singles and tour dates before the general public. Fans also could purchase items prior to the general public release dates. Carriers make money from the partnerships with music labels.

"(Carriers) use the purchase of those songs to help subsidize some of the airtime," Stricklin said. "I think if they do things like that, the impact of 3G could be significant."

Webnoize agreed and predicts that if wireless carriers cement relationships with entertainment conglomerates, mobile access to music and video will boost annual revenues for carriers by more than $7 billion within five years.

With that potential for revenue, more carriers will hope that their subscribers say, "I want my MP3."