iTunes and iPhone Ringtones: Another Step in Convergence

Apple is finally allowing consumers to convert their purchased iTunes music into iPhone ringtones. Here's a brief summary from AppleInsider.

iPhone Ringtones
In addition, iTunes customers will now be able to create custom ringtones by selecting up to a 30-second segment from over a million participating songs on iTunes and easily sync them onto their iPhone. Once a customer has purchased a participating song from iTunes, including previously purchased participating songs, it will only cost 99 cents to make up to a 30-second segment of that song into a ringtone and easily sync it onto their iPhone. Customers can personalize their ringtones by choosing which portion of the song they want to use, and setting custom fade in and fade out points. iPhone users can assign a custom ringtone to be their default ringtone and they can also assign them to individual callers in their address book.

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It will be very interesting to see how network operators react to this move as they were fighting hard to defend their profit streams from ringtones--which globally is estimated to be around $5 billion.

Winning in a network-era calls for careful understanding of likely shifts in the location of cash registers. In this case, the network operators, who could historically defend their ringtone profits, need to figure out a way to earn their share with other partners in the fast-changing business network.