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Contributors: Douglas McIntyre Jon C. Ogg

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Monday, October 16, 2006

Jumping to Conclusions (AAPL)

The fellows over at the Inquirer are fantastic at scooping hot stories, but their analytical skills appear lacking. Consider their breathlessly-headlined article Eighty per cent of top handsets support music:
EIGHT OUT of the world’s Top Ten best-selling mobile phones in September featured music-playing technology, according to a survey of sales on six continents and over 50 countries carried out for Krusell.Furthermore,the latest figures from IMS Research show that mobile phone sales will top 960 million units in 2006 and over 1 billion in 2007. The net result is that mobile phones are definitely eating into the market share of dedicated music players such as the eponymous iPOD from Apple.

Aside from the issue that the article appears to be little more than a rehash of Groove’s own press release, that is simply not a conclusion that can be drawn from the facts presented. It makes no difference how many phones offer music-playing technology if nobody uses it. How many features go unused on the typical handset?

If Groove wants to claim they are eating into Apple’s (AAPL) share they should tell us how many songs have actually been purchased on using their technology as compared to iTunes. They certainly issue enough press releases. One more ought not hurt.

And if the fellas at Inq want to use big words like eponymous they should look them up first.

The author may hold a position in the securities discussed. A current list of the author's holdings is available here.

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