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Download services such as Napster, record labels and mobile phone manufaturers all predict that 2005 will be the year in which Apple's dominance of the market for both music downloads, through its iTunes Music Store, and portable devices on which to play them, such as the iPod, will come under real pressure.

Some observers believe that where downloaded music is played - on a computer, portable player or phone - will not be the key issue of the year; rather, the battle will be between subscription-based services and those like iTunes which only offer paid-for-downloads. New DRM technologies from Microsoft will enable subscription music to be transferred to portable devices, which should have a significant effect on their popularity.

Chris Gorog, CEO of Napster, believes that when its subscribers can start to copy their music to portable devices with Napster2Go, Apple's market share will start to fall.

'We're unconcerned about the installed base of iPod users,' he said. 'Our primary market is people who have not yet entered the digital music market. As soon as Napster2Go

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is released, their market share is going to go down.'

Apple has resisted the subscription model, arguing that customers do not want it. The iTunes Music Store is a virtual record shop, and somethng that music buyers understand. Subscription services, on the other hand, do not conform to the way people have always bought music in the past.

How they listen to it has definitely changed because of the phenomenal success of the iPod. Whether a further change is imminent, with the phone taking centre stage, remains to be seen.

Although 3G phone users, for example, have been able to download songs for some time, the market remains relatively untested but potentially lucrative, if the $1bn-a-year ringtone industry is any indicator.

Apple believes it will be significant enough to warrant an iTunes-playing phone, currently being developed by Motorola, but service-providers are wary of any service that bypasses them.

Guy Laurence, global consumer marketing director for Vodafone, explained that this is because 'it excludes us from any after-market revenue stream. We'd have to think very carefully before we subsidised the cost of those phones for our subscribers.'

One thing that will not change in 2005 is the determination of the industry to pursue and prosecute music fle sharers. Seven thousand were sued in 2004 and John Kennedy, the new chief executive of the International Federation of the Phonographic Industry (IFPI) promised that, 'There will be more in 2005.'

'We look forward to the day when they won't be necessary,' he added, despite conceding that piracy can not be entirely defeated: 'if you don't fight the war, it gets worse.'