The digital-music business should expect a spate of consolidation during 2008 and 2009, predicts London-based research firm Point Topic in a new report.

The firm says that, in a global sector which has more than 498 digital-download services currently operating in over 40 markets, digital-music services with robust business models are expected to survive by being acquired by the major digital-music players, while the weak ones collapse.

Among the major digital-music companies Point says are expected to embark on an acquisition spree are mobile-phone maker Nokia, PC software giant Microsoft, and RealNetworks Inc-operator of U.S.-based subscription-funded service Rhapsody.

"There are too many online and mobile shops around," says Point Topic analyst Oliver Johnson. "Inevitably, there will be some that will have a big customer base that will be bought by the big boys, and those that won't be selling and fail."

Point Topic calculates that legal digital sales currently account for nearly 30% of the total U.S. music market, and for about 20% of the business in Europe. In total, it estimates that digital music generated $2.9 billion in revenues in 2007, a 40% jump from 2006.

Apple's iTunes Music Store continues to dominate the digital-music sector in the United States, United Kingdom, France and Germany. However, according to Point Topic, iTunes remains outperformed by mobile-music operators in Japan.

The research firm's analysis also concludes that the growth in mobile carriers' bandwidth will boost sales via 3G (third-generation) high-speed services. In a statement, Point added: "global 3G sales are starting to increase sharply, up more than 50% in 2007 and mobile subscriptions are still growing, up more than 20%."