A new report says that by 2008, China will be a major market for legal online music downloading with estimated annual revenue of US$222 million.

The In-Stat report says promising signs in 2005 include the launch of several third-party online music stores, and some unauthorized services, or those working in a gray area, legitimizing their services, the high-tech market research firm says.

"The end of 2007 will be the turning point for China's legitimate digital music market," said Anty Zheng, In-Stat analyst. "By then, several mega online music stores will have opened; the user base of portable music devices will have surpassed 100 million; a major crackdown on music piracy will have been in effect for several years; third-generation (3G) mobile communication system access will be rolled out; and consumers will be adequately educated about legitimate digital music."