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Cingular Could be Next in Music Sweepstakes

Cingular subscribers may soon be able to transfer digital music they consume from services such as Yahoo Music , and Napster, to their devices.

Is this something for the mighty Apple's iTunes to worry about? One analyst doesn't think so.

For starters, Cingular is being coy about the news: not quite confirming, but not quite denying, either.

"Mobile music is very important to us," Cingular spokesperson Mark Siegel told internetnews.com. "Stay tuned for an interesting announcement on it."

Yahoo, when asked about the service, directed inquiries to Cingular. Asked whether an announcement will be made Thursday, Siegel said: "watch this space tomorrow."

Along with uploading to their phones music obtained from music services, Cingular customers are expected to be able to transfer songs ripped from CDs and stored on their PCs. According to anonymous sources in a Wall Street Journal story about the service, the carrier will support music files in either MP3 or Windows Media format.

While Cingular plans to offer over-the-air downloads next year, initially, subscribers must connect to PCs via a cable for the service.

The move would break from carriers' traditional practice of requiring subscribers to buy music from their own music store stocked with songs costing around $2; Apple's iTunes and Yahoo Music generally charge 99 cents per track.

Carriers, including Cingular, see subscribers listening to music on their phones as a way to replace declining voice revenue. Verizon moved a while ago with its V-Cast music store and recently-released its Chocolate handset, which looks a lot like the iPod music player. Plus, Cingular has already teamed with Motorola to offer the ROKR and SLVR.

But carriers are facing a tepid response so far, according to Ken Hyers, an analyst with In-Stat, a research firm. "Until now, it's been throw it against the wall and see if it sticks," Hyers said.

The news could be a mixed-blessing for Cingular, according to Mike Goodman, digital music analyst with Yankee Group.

"It's a step to getting closer integration between the phone and PC," Goodman said. With the average user having 800 tracks stored on their PC, the addition of a subscription service provides a key component for carriers: music management capabilities.

However, while carriers such as Cingular say phones make the perfect multi-functional music gadget, "the phone still doesn't lend itself to listening to music," he said.

With cell phone giant Nokia reportedly on track to sell 80 million music phones this year, won't the ubiquity of the cell phone endanger the dominance of Apple's iPod? Not likely, Goodman said.

According to Yankee Group, 18 million mobile handset users will listen to music on their phones by 2010. By comparison, there are roughly 60 million digital music player users now.

Within the next two or three years, digital music player owners will need to replace those units. Might they turn to music-enabled phones? Goodman said 18 percent of digital music fans said they would buy a music phone instead.

For now, the news puts Cingular in a stronger position against Verizon and other carriers. However, pricing remains unclear. Carriers are charging around $2.99 per track while Yahoo offers songs for 99 cents.

But expect to see other carriers follow Cingular's lead, experts say. If and when someone is successful at it, mobile operators will all follow suit, Hyers said.