Pike & Fischer, telecoms market experts, have predicted that Apple will "transform iTunes into a wireless service for the new iPhone, or create a wireless offshoot of the popular online music service within the year".

They suggest that Apple will be forced to go down the wireless route in order to stay competitive - mobile phone companies offer over the air downloads in the States - although AT&T's recently launched version does not work with the iPhone.

Nokia is rumoured to be planning a big music download launch at the end of the month, although it is not clear is this will be a website-based service, or, an over the air service which would make sense considering their customer base.

"Consumer expectations will advance to the point where they will eschew reliance on a PC and cable to get content onto their iPhones and other portable devices," stated Pike & Fischer senior snalyst Tim Deal, one author of the report.

"Apple will therefore be forced to offer over-the-air downloads to remain competitive."

Unsurprisingly the report also says that Apple will have to reduce the price of the iPhone once its been on the market for a while and demands drops to entice a wider group of customers.

The other prediction is that Verizon Wireless - the company that was supposedly Apple's first choice for an iPhone partner but apparently turned them down for being too demanding - will launch an iPhone rival.

This launch, in collaboration with a manufacturer "such as Samsung" will be brought to market in time for the Christmas selling period.