Comprehension for Vodafones 'MusicStation'

Record labels are predicting that this month's launch of three new mobile phone music services will usher a return of rising sales after years of decline.

Apple's music-playing iPhone grabbed the headlines with its arrival in Britain last week. But music executives are just as excited about the new unlimited downloads service launched on Vodafone. Nokia, the world's largest maker of mobile phones, has also opened a digital music store here.

The world's biggest music company, Universal, is backing the MusicStation, the Vodafone service. Rob Wells, head of digital at Universal's international division, predicts the £1.99-a-week subscription service will have mass market appeal. "We are at a turning point in the UK," he says, predicting digital music sales here could offset falling CD sales within a year.

Global sales have been falling since 2000, down another 5% to $19.6bn (£9.4bn) last year, according to industry group IFPI. Although digital sales are rising fast, at a tenth of the total market, they have yet to make up for tumbling CD sales.

There are already indications that mobile music sales are picking up in the UK. The Orange UK network says its music sales jumped 70% over the past six months and it expects them to double by the end of 2007.

They expect the UK mobile music market to almost double from a predicted $83m this year to $156m in 2011. Four out of 10 UK mobiles can now play music.

There are hopes handsets will improve further from a music-playing perspective thanks to the iPhone. At £269 with an 18-month O2 contract, Apple's handset is not seen by the record labels as a big driver of revenues but it has been credited with raising the bar for phone manufacturers.

Jonathan Arber, analyst at telecoms experts Ovum, agrees, users want more simplicity in terms of being able to play what they buy across various devices. That is already happening with developments such as Sony Ericsson's Walkman phones, which synchronise with computers, he says.

1. What is it known as when companies mix 2 different applications such as phones and music players?

2. Will this service be good for CD sales or not? Why?

3. Who is this new service and new type of walkman phone primarily aimed at?

4. Why do you think CD sales have plummeted and sales of ‘digital’ mp3’s have boomed?