Apple (NSDQ: AAPL) has changed the way consumers buy ringtones from the company, bringing into question whether the largest digital music-retailer in the U.S. can breathe new life into the ailing mobile content category.

Last week, Apple announced a flurry of news, most of which centered around the company’s holiday iPod line-up. But buried in the excitement was a small tidbit shared by CEO Steve Jobs that Apple will start selling ringtones directly on the phone for $1.29 each. Now, almost 30 million iPhone owners around the world will have access to the 30-second audio clips that can be downloaded directly to the phone. John Fletcher, an analyst with SNL Kagan, said it’s not an obvious game-changer, but “we’ll see what Apple does because they are defining music whether everyone likes it not.”

For sure, ringtones could use a boost. Last year, mobile music sales declined, marking the first time for any mobile content category. According to SNL Kagan’s research, ringtone sales shrank 24 percent to $541 million in 2008 from $714 million in 2007. Fletcher: “It’s not because they aren’t using ringtones. It’s not that they aren’t popular. It’s that they’ve figured out how to do them for free.”

Previously, Apple charged 99 cents to convert songs that consumers already owned on iTunes into ringtones, but experience was clunky and not available on the phone or accessible beyond the U.S., said an Apple executive at last week’s event. The new experience, which is integrated into iTunes on the phone, is supposed to be better and cheaper if you compare the $1.29 price with the cost of buying the song and converting it into a ringtone—roughly $2 (although you won’t also own the full-track song). Initially, Apple will sell ringtones in countries where the iPhone is sold except for Ireland, Germany and Japan.

Not only is piracy one competitive factor for Apple, but since it has taken so long for Apple to launch a service, there’s already dozens of applications available in Apple’s own App Store that claim to sell ringtones.

Apple has a number advantages. Not only will the ringtones be integrated directly into iTunes on the phone, it also will be tied to user’s iTunes accounts. Convenience could be key. Price is also a factor. Often ringtones cost up to three to five times as much as a full-track song. In the early days, the prices soared mostly because consumers were willing to pay more, and because they had no way to convert songs they already owned. While that’s changed, prices have stayed artificially high because ringtone royalties paid to artists have been set higher than full-track royalties. At $1.29, you could consider it a bargain. Fletcher: “The music labels have been talking about reducing ringtone rates, but this is the first signs of this. It’s encouraging, and now that Apple is doing it, others may have to play ‘me-too’.”