Early reports of holiday sales this year indicate that sales of MP3 players went flat, while overall music sales were down at a dramatic rate. I wonder if this spells an opportunity for satellite radio.

Dollar sales of MP3 players between November 18th to December 9th were down 16% from the same period last year, while unit sales declined 9%, according to NPD. These numbers, sadly, do not include the iPod - which likely contributed to the decline in other MP3 player sales.

The sales plateau is likely the result of a saturated market. "The market is in a position where most of the people who want an MP3 player have one," NPD analyst Stephen Baker told InformationWeek.

"The iPod is not exactly a blistering growth segment," Baker said. "It's a good segment, and you'll still make money on it, but it's not growing 75% a year."

Shoppers were choosing cheaper - and smaller capacity - flash versions of MP3 players, rather than the more expensive hard-disk-drive versions. Most people don't have enough music and video files to justify paying more for a device with 80-plus gigabytes of storage, Baker said.

Meanwhile, overall music sales during the Christmas shopping season were down an incredible 21% from last year, reports Variety.

From the week of Thanksgiving up through the day before Christmas Eve, 83.9 million albums were sold. That's a whopping decrease of 21.38 million units from 105.28 million in 2006.

All this could mean good news for satellite radio. A sharp decline in overall music sales, plus flattening sales of digital music players (with smaller capacities), means that many people will have less to listen to - especially during an arduous commute.

Marketing the message "hey, you with the teeny MP3 player and no CDs in your car, subscribe to satellite radio!" may be a bit more difficult to get across... but the opportunity is still there. Just need to find a way to seize it.

And speaking of opportunities, at the same time that MP3 and overall music sales are down, dollar sales of GPS devices were up more than 214% and unit sales soared 488%. Kind of makes you think there was a missed opportunity there.

[InformationWeek, Variety]

In the past year, more Americans have become used to thinking of their cellphones as entertainment devices at a soaring pace, according to a new-media survey from Deloitte & Touche.

Deloitte's first edition of the survey (which was performed just 8 months earlier) showed that 24 percent of U.S. consumers used their cellphones as entertainment devices. Since then, a follow up survey shows that entertainment usage on cellphones jumped 50 percent, bringing the total of U.S. consumers who use their cellphones as entertainment devices to 36 percent.

The findings of the survey of 2,081 Americans, conducted in late October, were provided to The Hollywood Reporter before their official release next month.

Roughly 62 percent of "millennials" (13-to-24-years-old) are using their cellphones as entertainment devices - that's up from 46 percent in the previous study conducted in late February. And among Generation X consumers (25-to-41-year-olds), the number grew to 47 percent - up drastically from 29 percent in the earlier survey.

That's a pretty rapid adoption rate. And only in eight months. Now imagine how that usage will grow in the next two years?

Note to Sirius and XM: If you want to ride this wave - stop thinking of your mobile services as a revenue generators, and start thinking of them as a lead generators. The key to adoption, is exposure.

[Reuters]

In a recent research note, Goldman Sachs analyst David Bailey said that he believes Apple will introduce not one, but two iPhones in 2008.

Bailey's contacts have lead him to believe that "Apple has several important new products lined up for 2008," though they aren't expected to have the same impact as the launch of Apple's inaugural iPhone device.

The first revision of the iPhone is expected to come in the form of simply a storage upgrade. The next is a second-generation iPhone currently in its "final design phase." The device is expected to "have a similar form factor as the current version although it could have a different look and will probably include 3G capability."

AT&T's CEO leaked that a 3G iPhone would be made available next year, so that's little surprise. 3G capability will of course enable the iPhone to stream data, like audio (and iTunes Radio), at faster speeds.

The analyst estimates that the next-gen iPhone will launch sometime during the second half of the year.

Bailey also said that the iPod Touch and Nano are seeing strength in demand. Separate reports have said that the iPod Touch was selling "far better than expected," causing one of the Apple's manufacturing partners to increase production to 5.1 million units for the current quarter. In this week's report, Bailey added that his supply chain contacts are expecting yet another year of double-digit iPod growth in 2008.

[AppleInsider]
(Audi's iPhone integration pictured)

Yes, that's a double-negative in the headline. In other words Uncle Walt, the leader of all tech writers, isn't necessarily against the Slacker Portable, but he's also not in love with it... yet.

Walt Mossberg (who yelled the infamous words, "I don't give a fuck about your stock price!" at XM's former CEO Hugh Panero a few years back) overall seemed to find the Slacker service/player intriguing. His biggest problem - granted, it was a prototype he was playing with - was the bugs that need to be worked out of the player.

"The two prototype Slacker units I tried, however, were hobbled by bugs and glitches that the company must expunge by the release date, which was originally slated to be this month. For instance, the players sometimes failed to wake up after going to sleep, requiring a reboot. The touch strip was unreliable. One player failed several times to connect to my account. Battery life is well below Slacker’s goal of 12 hours between charges. The company says it is aware of these problems, and pledges all will be fixed."

Which explains why the Slacker Portable player has been delayed. Still Mossberg seems to like what he sees so far, but his hope for the service itself is that the ads aren't too annoying.

One interesting thing to note: he compared the Slacker service to Rhapsody and of course to Sirius and XM:

"And both the Sirius and XM satellite-radio networks offer portable players for listening to their stations, although the stations can’t be customized."

I think that's an important distinction. Slacker is meant for consumers who have no desire to program entire playlists of music - but it still has an easy way to customize the music you're listening to.

Satellite Radio on the other hand has absolutely no interactivity. There is a growing desire by consumers to increase control over their media experiences. Sirius and XM need to come up with solution for this, to create the feeling of interaction and control, because the influence of this trend in consumers' thinking is significant and real. I'm not sure how, I just know what, needs to be done to adapt for future trends.

But I digress.

Watch Mossberg's quickie video review below...

[All Things Digital]

Nokia, the world's biggest cellphone maker, yesterday announced a deal with Universal Music Group that will give customers buying select mobile devices unlimited access to millions of tracks for a year - and lets them keep the music afterwards.

Nokia is hoping that the other Big Three music labels will soon be on board.

Starting in the second half of 2008, the program (called "Comes With Music") lets folks who buy a qualifying phone to have unlimited access to Universal's entire artist catalog for a year. Once the year is over, you can keep all that music without it disappearing when the subscription is over.

The one downside (and it's a big one) is that the tracks are protected with Microsoft's PlaysForSure DRM, according to Ars Technica. If you want to burn the music to a CD, you need to pay. Hopefully Nokia and/or Universal will learn the err of their ways and remove the DRM caveat, because that would be the largest stumbling stone preventing this from taking off.

Of course, Nokia isn't disclosing which phones/devices need apply, and they didn't say what the terms of the deal were. But Universal's digital operations chief, Rob Wells, told Reuters in an interview: "Unless there was enough money for the world's biggest record company we would not have agreed to the deal."

DRM or not, it's still a big deal. And one that has the potential to turn both the mobile audio, as well as the unlimited music subscription services, on their collective heads. Nokia moves a lot of phones, and if they make the "Comes With Music" service available on a large number of handsets, that means there's now instant access to millions of songs in a lot of people's pockets.

Why should Satellite Radio care? Because Nokia obviously is seeing a value in providing music on mobile devices, and is pushing their leadership position hard to make sure they have a foothold.

Just a couple days ago, Nokia unveiled Nokia Internet Radio (pictured at right), a free downloadable application that will also be embedded in upcoming Nokia S60 3rd edition devices. It's essentially a directory, and an interface, of internet radio stations accessible on your Nokia phone.

Browse by station name, genre, country or language. Nokia Internet Radio also updates the top ten most popular internet radio stations hourly in its own special directory. The service also lets you save a list of "Favorites" - essentially presets of your top station - so they're accessible right away. And it's free.

The NAB says that there is no other "Nationwide Multichannel Mobile Audio Service" out there to compete with Sirius or XM.

I beg to differ.