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Apple, Music Labels Discuss 3G iPhone Possibilities

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IDC expects that mobile entertainment will account for 5.1 percent of the $800 billion global wireless services revenue and 23 percent of all mobile data revenue by 2011. Ringtones and ring-back tones (answer tones) are expected to lead the way, along with mobile television and video services. Ring-back tones should overtake ringtones by 2010 to become the single largest revenue source in the mobile entertainment category by 2010, IDC reported. "I'm surprised Apple hasn't done more around ringtones. Right now, iPhone users can't buy AT&T ringtones, which is rather curious. I have suggested that Apple has its own walled garden of content , if you will," said Lewis Ward, an analyst at IDC. "Ringtones have been one of the success stories around mobile entertainment services in the past five years, growing from nothing to $1.2 billion in the U.S. this year." Apple is reportedly looking to add ringtones, ring-back tones and songs downloaded over-the-air directly from its iTunes Store over a cell phone broadband network. The music labels are reportedly arguing that hey should be paid more for an over-the-air download than a track bought over the Internet.
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