Apple's iPhone mobile handsets are "substantially expanding" the digital music marketplace around the world, Warner Music said yesterday as it unveiled third-quarter earnings showing new business areas easing the continued steep decline in compact disc sales.

Edgar Bronfman, chairman and chief executive of the US-listed group, said strong sales of the iPhone were "raising the profile of music in the mobile world", suggesting hope for an industry that has struggled to persuade consumers to pay for music on their computers. Warner's total digital revenues grew by just 11 per cent year-on-year before currency headwinds, as ringtone sales ebbed.