Omnifone May Put A Dent In iPhone, iPod, iTunes Store.

Finally, some solid competition for Apple’s iPod, iTunes Store, and iPhone. All others have failed.

Why do I think Omnifone has a chance to compete against Apple’s music might? Omnifone is different, priced right, and has a huge customer base.

I know what you’re thinking: “Wait a minute, Jeffrey. How is that possible? Everyone has failed to dent Apple’s iPod machine, right?” Right. So far. But the winds are changing.

To date, the only online music service that’s done a fair job of coming in at #2 behind Apple is eMusic, which sells non-copy protected MP3s. Apple dwarfs eMusic in size and customer base and has thrashed all wannabe iPod, iTunes Store killers.

What’s different with Omnifone? Apple tipped their hand to the future by pre-announcing the iPhone, a slick-looking multi-function device with built-in iPod, wireless internet browser and email, and a cell phone. And a big price tag.

There is little doubt that even at the higher price points Apple has created a great buzz for a new product and will sell millions of iPhones (the bad-mouthed Motorola RAZR plays a weak imitation of iTunes and they sold a million units).

Apple needs to have music on a cell phone to protect the iPod revenue stream as tens of millions of cell phones are being sold with MP3 music playing capability. Still, Apple’s competition hasn’t figured out how to keep the music playing simple—until now.

Enter Omnifone, a startup with plenty of money, 23 cell phone operators in 40 countries, a subscriber base of nearly 700-million customers, and a over a million songs from all the major record companies. Even Apple doesn’t have all that going into the iPhone launch.

Omnifone has something else that will prove to be attractive to cell phone users who don’t want to ditch their cell phones for Apple’s high priced luxury phone.

All the music a cell phone user wants for a flat monthly fee, from about $3.50, simply added to the cell phone bill. Plus, the songs can be downloaded straight to the cell phone.

While Apple may expect to get one or two percent of the cell phone market in the next couple of years, Omnifone’s MusicStation software works or will work with 75-percent of the music playing cell phones, literally hundreds of millions of phones.

That combination will begin to turn the tide of music away from Apple toward Omnifone and the hundreds of millions of cell phones that can download and play music. Yes, it’s subscription music and priced right, delivered right to the phone, with a huge market to start.

The music industry loves Omnifone, the cell phone carriers love Omnifone, and I’m willing to say that within a couple of years, more people will be listening to music on their Omnifone-playing cell phones than listen to music on iPods.

In fact, over time, Omnifone may become #1 in online music sales. iTunes Store could very well be the second largest music store online by the end of 2009.

Some may disagree with my observation and prediction, but the handwriting appears to be on the wall. iPods and iTunes Store are not the future on online music or media.