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Momentum is Slowing for Mobile Content

Forbes reports that despite the recent buzz about entertainment on cell phones, the mobile-content market has hit a speed bump.

After an initial burst of growth, mobile content -- which can include everything from ring tones to video clips -- is struggling to break out of the early adopter segment and achieve mass consumption. It is too soon to forecast the demise of this promising new field, but it is evident that wireless entertainment is wavering during a crucial transition to third-generation mobile telephony, or 3G.

According to Seattle-based mobile market research firm M:Metrics, consumption of wireless content has flatlined. After eight quarters of rapid growth, sales in the two main categories, ring tones and mobile games, have stalled. Every month in the U.S., only 10 percent of mobile subscribers download a ring tone to their phones, and less than 4 percent download games. Text messaging is holding steady at about 33 percent.

On advanced 3G handsets, consumption is about three-times stronger than on the older, more widespread 2.5G phones. But 3G unit numbers remain tiny. Two years after the introduction of video on cell phones, 2 million Americans, just 1 percent of the market, pay $10 to $15 per month for the service. Unless the 3G audience expands rapidly, current levels of investment in the creation and delivery of rich content such as 3-D games and video may be unsustainable.

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