iPhone to arrive Friday, save world

If the hype is to be believed, the device that will change the game forever arrives in stores on Friday. The iPhone, the do-it-all, music-playing phone, will only be sold at stores owned by Apple and AT&T, which has an exclusive deal to offer service for the device. The phone will also be for sale on Apple's Web site at launch, and on AT&T sites and at other stores after the initial launch. AT&T owns 1,800 retail stores which it has been rebranding from Cingular since taking over complete ownership late last year, but thousands of other franchise outlets carry the AT&T or Cingular name.

But while the iPhone is set to make its long-awaited arrival, it won't come cheap. In addition to the cost of the device--between $499 and $599 depending on the storage capacity--AT&T's iPhone service plan will cost between $59.99 and $99.99, compared with regular AT&T plans that cost from $39.99 to $79.99 for the same amount of airtime. The cheapest iPhone plan is priced at $59.99 for 450 minutes of talking time, but that fee also includes unlimited access to data such as e-mail and Internet.

eMusic looks to capitalize on iPhone launch

eMusic, the digital music subscription service that trails only iTunes among digital download stores in market share, said this week that it has offered Apple CEO Steve Jobs a lifetime subscription to eMusic. The announcements comes on the even of the launch of Apple's much-hyped iPhone, as eMusic hopes to lure iPhone customers to its service, which offers DRM-free downloads for a monthly fee.

eMusic said it offered the subscription "to thank Jobs for his support of the removal of digital rights management (DRM) software from online music. Because every track sold on eMusic comes without DRM, it's the only significant legal music download service, other than iTunes, whose tracks will play on the iPhone." eMusic is also offering 35 free tracks to anyone who signs up for an eMusic trial at its iPhone-related promotion site.

iTunes now third-largest music store

Gone are the days when Apple's iTunes was vying with like Napster and Rhapsody for the top slot among digital music retailers. Now iTunes is battling with big box retailers Wal-Mart and Best Buy to be the biggest music store in the US. According to the latest survey from NPD Group, iTunes is now the third-largest music retailer in the US with 10 percent market share, overtaking Amazon.com in the first quarter, according to NPD's survey of 40,000 people aged 13 and older.

iTunes' 10 percent trailed Wal-Mart's 15.8 percent and Best Buy's 13.8 percent market share. Amazon.com Inc. dropped to fourth with a 6.7 percent share. Its sales increased but not as fast as rivals.

MP3 player sales slow down

After years of off-the-chart sales increases, MP3 players seem to have reached a saturation point, according to an Associated Press report. The story stemmed from the recent quarterly financial reports from retailers Best Buy Co. and Circuit City Stores Inc., both of which indicated that there has been an across-the-board slowdown in sales of digital music players. Nearly one in four US households now owns an MP3 player.

Given that near saturation and the impending arrival of the music-playing iPhone, some analysts indicated that the days of record growth might be over. "We're still seeing sales growth of about 20 percent this year," James McQuivey, an analyst with Forrester Research, told the AP. "But it won't be what it once was."

Sony makes Connect layoffs, sparks rumors

Sony Connect, long mired in iTunes' shadow among digital music retailers, has made a round of layoffs that have sparked rumors that the Japanese giant intends to close the download service. The company has denied reports that Sony Connect will be shut down, saying it is shifting emphasis to other network services, specifically one for users of the PS3 and PlayStation Portable game consoles.

Sony Connect launched in 2004, but like other online music services, it has had a tough time competing against Apple's iTunes, which is tied to the dominant iPod player.

Imeem launches ad-supported service with Snocap

Imeem and Snocap have teamed up for an ad-supported digital music service that Imeem hopes will sufficiently address the legal concerns of the music industry. Imeem, which has built itself into one of the top music sites on the Web behind its social networking tools and the ability of users to upload, share, and stream music, was hit with a copyright infringement lawsuit last month by Warner Music Group. The label giant said Imeem had built a base of 16 million users by capitalizing on the "illegal use of 'free music.'"

The new service will continue to allow users to upload and share music, but will impose limits. The service automatically identifies uploaded content and determines whether the content owner has permitted streaming on Imeem. The service will distribute a share of the advertising revenue to the artist or record label. Users will still be able to listen to their own songs in full, but if they share a song Imeem will now only play a 30-second clip unless the artist or label has given permission for it to play in full.