Are reading news like: "the content market is going down", "mp3 handsets make ringtone sales superflous", ... ?

Well, here are my two pence:

That is male, wild cow excrement.

- Content sales are strongly connected to handset sales
Especially true for games and applications, but also for ringtones etc. Currently the handset sales in europe are generally decreasing, hence also the content sales. Handset sales will dramatically increase again as soon as a new technology step is taken.

- The average MP3-song is not directly usable as a ringtone.
A ringtone generally has a purpose!!! It alerts the user that somebody wants to talk to him. Many pop-tunes have intros that slowly build up and introduce the actual song theme. A proper ringtone catches only the most recognizable part of a song. The task of identifying, cutting and tweaking such part is definitely exceeding Joe Couch-Potatoe's abilities.

Rest assured, the market is not dying!