Apple iPhone Expected To Spur Mobile Marketing

Apple's new video iPod/cell phone combo could well transform the nascent mobile advertising field, marketing executives said Tuesday.

"A killer app, overnight, can change what happens," said Gene Keenan, vice president of mobile services for digital marketing network Isobar. The iPhone, he added, with its ability to display high-quality video, could easily be such an app. "Apple has definitely sparked a revolution with this phone."

The new Wi-Fi-enabled device, unveiled Tuesday at MacWorld, lets users make phone calls via Cingular, and also download and play music and videos; Apple also has partnered with Yahoo and Google to incorporate their search engines and email. In addition, with a wide 3.5-inch screen, the phone offers new promise for wireless video ads.

"This is the beachhead for converging mobile devices. It's a music player, video player and a phone all together," said Tom Burgess, CEO of mobile marketing technology company Third Screen Media. "There's no doubt that it is a step in the right direction for a more robust marketing medium."

Cyriac Roeding, vice president of wireless at CBS Interactive, agreed that the new iPod phone, slated for release in June, is likely to spark a surge in mobile marketing--provided that users embrace it the same way they turned to the iPod a few years ago. "If we can get the same effect in the wireless world, then we will see an uptick in mobile advertising automatically," he said.

Burgess estimated that the iPhone will need at least 5 million users a month to attract serious ad dollars--a feat that might be difficult, given the $499 starting price.

But some analysts think consumers--at least the early adopters--will decide the phone is worth the money. It comes with a host of user-friendly features, that are likely to appeal to buyers, said eMarketer senior analyst for wireless John du Pre Gauntt. For instance, the device allows people to scroll through voicemail visually, the way they scroll through music and e-mail--"behavior we now take for granted in the PC and consumer electronics world," Gauntt said. Apple itself forecasts it will sell 10 million iPhones next year.

Downloading music or videos is expected to be seamless--which analysts say will speed adoption of mobile content. If that proves to be the case, marketers will likely step up sponsorship efforts by, for example, offering free downloads, Gauntt predicted.

To date, consumers have been slow to download music to mobile devices. In the third quarter of last year, around 23.5 million cell phone subscribers--or 10.5%--had music players on their handsets, while just 2 million had downloaded full tracks, according to a study released this week by mobile research firm Telephia.

The iPhone isn't the only development this week that's likely to drive a mobile marketing surge. Verizon and Qualcomm's MediaFlo Monday unveiled a plan to stream live TV to cell phones--which also will likely encourage the growth of mobile video ads, said CBS's Roeding.

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