Old-school music labels might have some life left in them it seems. According to a NY Times article (Saul Hansell), Apple has approached some major labels to strike a deal to include ringtones and other music features in the new launch for the currently less-than-spectacular iPhone.
Customers can purchase a "ringtone upgrade" for a purchased song download, for $.99. At present, not every song can be converted into a ring tone and the process is not immediately intuitive for the casual user; you must actually create your ringtone by using the ringtone editor. Despite following the instructions on creating ringtones in iTunes, we were unable to actually do this, at the writing of this article. Clicking the "bell" icon resulted in the repeated re-direction to the instructions page.
According to the article, the major focus is the ability for iPhone users to purchase songs directly on the iPhone. 3G networks are certainly capable of handling the transfers, the barrier, however are the label bosses demand of outrageous whole sale pricing for the ability, about $.70/song.
Apple is fast becoming the sole retail digital distribution method for wired and wireless networks. Without other real contenders on the horizon (perhaps Walmart in a few years), real competition does not currently exist for Apple. Although they probably don't resemble a monopoloy, in the Microsoft sense, lack of market competition leaves consumers in the hands of one man.