Wireless Federation

Apple(R) today announced that iTunes(R) (http://www.itunes.com/)is now the number two music retailer in the US, behind only Wal-Mart,based on the latest data from the NPD Group*. Apple also announced that there are now over 50 million iTunes Store customers. iTunes has sold over four billion songs, with an incredible 20 million songs sold on
Christmas Day 2007 alone, and offers the world’s largest music catalog of over six million songs from all of the majors and thousands of independent labels.

“We’d like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone,” said Eddy Cue,Apple’s vice president of iTunes. “We continue to add great new features like iTunes Movie Rentals to give our customers even morereason to love iTunes.” Last month, Apple launched iTunes Movie Rentals featuring movies
from all of the major movie studios including 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount, Universal Studios Home Entertainment, Sony Pictures Entertainment, Metro-Goldwyn-Mayer (MGM),Lionsgate and New Line Cinema. Users can rent movies and watch them ontheir PCs or Macs, all current generation iPods**, iPhone(TM) and on a
widescreen TV with Apple TV(R). iTunes Movie Rentals will offer over 1,000 titles by the end of this month, including over 100 titles in stunning high definition video with 5.1 Dolby Digital surround sound which users can rent directly from their widescreen TV using Apple TV.

iTunes 7.6 is available as a free download at http://www.itunes.com/. iTunes Movie Rentals are available in the US only and are $2.99 (US) for library titles and $3.99 (US) for new releases, and high definition versions are priced just one dollar more with library titles at $3.99 (US) and new releases at $4.99 (US). Movie rentals from the iTunes Store for Mac(R) or Windows require iTunes 7.6. iTunes Movie Rentals require a valid credit card with a billing address in the country of
purchase.

*Based on data from market research firm the NPD Group’s MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions.The iTunes Music Store became the second-largest music retailer in the US after Wal-Mart, based on the amount of music sold during 2007.

**Movie rentals work on iPod(R) classic, iPod nano with video and iPod touch. Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the
Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its
revolutionary iPhone.

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In a mobile phone variation of the “shop ’til you drop” phenomenon, Sprint Nextel has launched a free shopping service for its subscribers.
Announced Thursday, the Mobile Shopper service enables subscribers to purchase products from more than 30 retailers including Target and Wal-Mart. The service, powered by mShopper, is the company’s first mobile shopping service to be offered in the U.S., Sprint said.

Sprint said the service is offered free-of-charge, although subscribers will be charged for Internet access. Mobile Shopper will enable users to instantly compare online prices with in-store prices, enabling them to find the lowest prices for products. Mobile Shopper accounts can be established directly on mobile phones or on subscribers’ PC. A secure PIN protects shipping addresses and credit card information.

Sprint’s demo of mShopper notes that the browser interface allows the shopper to send the information to a friend’s phone, e-mail the information for future reference, talk to a live sales agent, or purchase the item. The shopper must have a Web-enabled phone for the service to work.

“With Mobile Shopper, Sprint customers get a powerful shopping tool that they can use on-the-go to buy products or compare online prices to in-store merchandise,” said George Ranallo, Sprint’s director of consumer data applications, in a statement.

Sprint cited a report by Alan Goode, a Juniper Research senior analyst, who has estimated that North American mobile phone purchasers will spend $505 million in 2008 with the number expected to swell to $1.9 billion by 2010.

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The paid video download market is a dead end, according to a report by Forrester Research. Paid video downloads are forecasted to peak in 2007, generating USD 279 million in revenue, up from USD 98 million last year. Instead, according to the report, advertising models will drive the online video market. In the past year, companies such as Apple, Amazon, Microsoft, and Wal-Mart have begun offering consumers the ability to download television programs and movies to own or rent. But a recent Forrester survey showed that only 9 percent of online adults have ever paid to download a movie or TV show. Furthermore, an analysis of these consumers showed they are a niche of media junkies willing to spend heavily on such content; they do not represent the vanguard of a rush by mainstream consumers.

Some implications of this shift mentioned in the report are that Apple will have to rethink Apple TV, changing it from a closed pay-per-view system to an ad-supported, broadband service provider model that puts YouTube videos as well as ABC.com TV shows directly on the TV. At the same time, internet-friendly set-top boxes from Cisco and Motorola will give Comcast and Time Warner a way to offer competing internet-based, ad-supported content.

Furthermore, Television networks will allow ad-supported downloads of prime-time TV shows. New technology such as the recently announced Adobe Media Player will allow consumers to download video for playback without losing the ads that were sold with the video. Forrester expects ABC to go first in 2008, with other networks quickly following.

Paid video download pioneers CinemaNow and Movielink will shift their expertise to partner with satellite and telecommunications service providers provide video-on-demand (VoD) content without a huge investment in VoD infrastructure. Also, streaming of ad-supported TV shows is expected to eclipse DVR use by the end of 2008. Advertisers will cheer because this shift thwarts ad-skipping; consumers will applaud this breakthrough because it’s cheaper than a DVR and is more flexible.

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