Mobile manufacturers face the music

Mobile manufacturers are increasingly designing multimedia handsets which can play music in a bid to compete with MP3 players and boost margins.

Nokia recently launched a music phone, the N91, and other manufacturers are following suit. British handset manufacturer Sendo has announced its first music handset, the X2.

"Business phones offer quite high margins but getting the [sales] volume can sometimes be difficult," said Ron Schaeffer, Sendo's product management director.

"Consumer phones like [the X2] offer high margins and there's also a high volume demand. You only have to look at the size of the MP3 player market to see that consumer demand is there."

Unlike the N91 the Sendo X2 uses removable mini-SD memory cards rather than a built-in hard drive. Songs can also be downloaded via a combination USB/charger cable.

"In the short term iPods have nothing to worry about. People like having their music on a separate player that they can manage and organise," said Simon Dyson, senior analyst at Informa Media.

"But as battery life improves, phone capacities enlarge and buying songs using a mobile phone becomes easier, they may start cutting into the MP3 player market. But this is a few years away yet."