“[Apple Computer, Inc. is] developing an iPod phone with Motorola Inc. that the pair have started marketing to wireless operators. Motorola says it expects at least one carrier will begin selling the phone this summer. If that happens, the carrier would not build its own music store and instead send its customers to iTunes,” Roger O. Crockett reports for BusinessWeek.
“But Apple has had a rough start in working with wireless operators. Most major wireless companies, including Verizon Wireless and Sprint, have balked at carrying the iPod phone. That’s a serious impediment because the operators essentially control distribution by subsidizing phones. Why the resistance? Operators want customers to download songs over the air, directly to handsets. But with the iPod phone, customers would download songs to a PC and then copy them to the phone. ‘It’s hard for people in any industry to support something that cuts them out of potential future revenue streams,’ says Graeme Ferguson, director for global content development at Vodafone Group, one of the world’s largest wireless players. Apple declined to comment for this story,” Crockett reports.
“The two sides also have very different perspectives on how digital music stores should work. Verizon, Sprint, and Cingular are expected to charge about $2 for wireless downloads when they introduce their services, or twice the 99 cents per song on iTunes,” Crockett reports. “They figure they can charge a premium for the convenience of getting songs anytime, even though customers most likely won’t be able to listen to those songs anywhere but on their phones, at least initially. One knowledgeable source close to Apple says the operators are simply being unrealistic if they expect customers to pay $2 or $3 for a song, especially with restrictions. ‘If you can get something for a buck, why would you buy it for $3?’ says the source. ‘Do they think people are that dumb?'”
Full article here.
Related MacDailyNews articles:
Motorola to unveil iRadio – PC to Mobile to Car Stereo service – April 18, 2005
Will Motorola’s Apple iTunes phone make it to market? – March 28, 2005
BusinessWeek: What’s going on with the Motorola Apple iTunes mobile phone? – March 24, 2005
So who’s really delaying the Motorola iTunes phone anyway? – March 21, 2005
Motorola exec: Apple iTunes phone debut delayed by Steve Jobs; phones will launch in 2005 – March 16, 2005
Motorola’s Apple iTunes phone in trouble? – March 14, 2005
Motorola says iTunes phone unveiling delay not caused by dispute with carriers – March 10, 2005
Motorola says it’s working on more iTunes phones, some models ‘can store eight hours of music’ – March 10, 2005
Motorola indefinitely postpones Apple iTunes phone unveiling – March 10, 2005
Motorola’s ‘ROKR’ Apple iTunes mobile phone to be unveiled this Thursday – March 06, 2005
Motorola’s yet-to-be-unveiled ‘ROKR’ phone will be first Apple iTunes phone – February 16, 2005
Motorola E1060 not, repeat not, the iTunes phone – February 16, 2005
Motorola executive previews iTunes Phone at CES, syncs to iTunes like an Apple iPod – January 06, 2005
Apple’ prodigious hardware and software design skills may help Motorola create iPod phone – December 28, 2004
Apple, Motorola iTunes on cell phones a harmonious deal that benefits both companies – August 05, 2004
Motorola posts Steve Jobs’ Apple iTunes announcement video – July 28, 2004
Apple, Motorola iTunes deal not exclusive, debuts Apple’s licensing of FairPlay DRM – July 27, 2004
Motorola and Apple to bring iTunes Music Player to Motorola’s next-gen mobile phones – July 26, 2004
Yes. Yes they are that dumb. But not really. Sure people realize they’re getting ripped off. But if they only buy a song via their phone 1 in every 10 downloads, then the phone companies win.
Its like soda. Run up to Krogers, or Food Lion and buy a big old 6 pack of 20oz bottles for $5. That’s roughtly $.81 a bottle. Yet vending machines now-days charge $1.25 a bottle. Most people when they want a soda pull one out from the fridge, but if one isn’t near, and they have a craving, they’ll run to a vending machine and pay the premium.
Same with phones. Ever had a song stuck in your head and you weren’t near a computer…?
Send a letter to Verizon, Sprint and others. Tell them what you want not what they think you want. 100%+ profit. I’ll stick with ipods. Now is the time for Apple to open their own phone company.
Greed thy name is telecom.
Yes people are that dumb! Enough people would pay $3.00 a song to make it lucrative enough…
This subject is dead.
Apple lost this one.
Hasn’t been lost yet. Not at all.
t-mobile will do it
$20 says so
they have the latest and greatest phones all the time, which kinda sucks since thier coverage blows
I will switch back to them if they get it however
The world is shifting to the phone away from ipod…???
ipod for music only from iTunes????
Infinity plans to broadcast to mobile phones
LOS ANGELES (Hollywood Reporter) – Nokia’s Visual Radio, which merges traditional FM radio with mobile phone interactivity, is set to go live in the United States, under a deal with Infinity Broadcasting disclosed Monday at the National Association of Broadcasters convention in Las Vegas.
The announcement was made with Nokia’s technology partner, Hewlett-Packard.
The partners are determining which of Infinity’s 185 radio stations will be the first in the country to offer the service to their listeners. Mobile phones with the capability to receive Visual Radio will be available in the U.S. within six months, according to Reidar Wasenius, Nokia manager, Visual Radio.
“It adds another dimension to FM radio,” said David Goodman, Infinity president, marketing. “I love the idea of everyone walking around with a portable radio that happens to make phone calls and show great pictures.”
Consumers receive the standard FM radio broadcast on their mobile phone. Simultaneously, Visual Radio sends whatever information and graphics the station wishes to the handset’s screen, delivered via the cellular network. The result is increased listener time, brand loyalty and additional revenue streams for the station, Goodman said.
If the information in the Business Week story proves to be true, my family will be dropping Sprint, and we now will no longer consider Verizon as a possible replacement. With Sprint and Verizon crossed off the list, I think the carrier most likely to consider carrying the iTunes phone is T-Mobile, which has adopted innovative phones in the past and cultivates a hip, more youthful marketing strategy.
I’ve said it in this space before and I’ll say it again: To make this work, Apple will have to license Sprint bandwidth and create its own phone company — just as Virgin has done. The regular cellular carriers will screw this up — they’re too greedy and not customer-oreinted.
In detailing the cell phone threat to the iPod, the Business Week story conveniently overlooks one issue though — cell phones still require a lot of power and they do not provide 18, 12 or even 8 hours of battery life and they will not have the power to spare to be used for playing music. Period. And cell phones already do a very poor job at the one task we’d like them to do really well — make and receive clear calls without dropping the signal, and last at least a full day without needing a recharge. The first cellular carrier that finally gets these priorities straight will win customers of the future.
Why would anyone want to listen to their paid music on a phone? When is the last time you saw someone rocking out with a phone to their ear?
I, for one, don’t get it. Why do I want music on my phone? I find it annoying to hear music playing from others cell phones when its used for rings.
This is why I have an el cheapo prepaid phone that sits in my car for emergency purposes only. All these companies do is charge you for every little thing – it’s ridiculous. In return, you get what? A bunch of dropped calls and piss poor coverage. I don’t think so. These companies make so much money off of consumers it’s sick. Yet, we let do whatever. I am also sick of hearing about how cell phone companies subsidize the phone and blah-blah-blah. Either through you paying a monthly service or breaking a contract, the cell phone company will get its money back. Be realistic. The cell phone companies are obviously not buying the headsets at full retail. It’s just one big rip-off.
Ugh, I can’t get my thoughts out. Talking about cell phone companies make me irate.
Next, they’ll be charging you for how many words you use in your conversation.
Ed and Jeff – I am with you one this one.
In fact, I will go so far as to say that cell phones as music players has to been one of the most iditoic ideas I have ever heard of.
Talk about short battery life and miniimal storage!
I hope Apple just blows this off
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I just switch to T-Mobile – that would rock!!
So at one end we have claims that people will rather pay a subscription than 99c a song and at the other that people will pay $2 or $3 to download a song. Can they really both be right? Certainly not in the long run.
(the magic word I had to key in was ‘know’ says it all I think)
I think the iPod/Phone idea is a bad idea. I still say, make a freaking phone that works and works well as a phone. Then and only then think about adding the camera and other irrelevant extraneous features. As far as the service providers not carrying the iPod phone, SO WHAT? Guess what. I’LL NEVER DOWNLOAD MUSIC DIRECTLY TO A PHONE OVER A STUPID GPRS NETWORK. Ain’t gonna happen. Nope. Never. Uh uh. You nickel and dime me to death for everything else. Screw you.
People pay $2 or $3 for a stupid ringtone (a total waste of money). So, it wouldn’t surprise me that some would pay the same amount for the impulse purchase of a song now and then.
I guess that’s why they call it “disposable income”.
Go Apple!!!!!
People are dumb. People use window. People spend $3 for a 30 second midi ringtone for a cell phone.
bah, windows***
Geo is right!
Apple needs to become its own MVNO. That’s the only way to provide an integrated mobile experience. I’m stunned that Apple did not see this problem emerging. It’s a no brainer. The carriers don’t even want to share branding with Nokia, they sure as hell don’t want their brands overshadowed by one of the strongest brands in the world, Apple.
“Apple Mobile” should have launched by now and Apple should have trademarked iPhone a long time ago.This has been a serious miscalculation by Steve Jobs which puts Apple way behind.This mistake will make the cube look like a blip.
Now it’s possible that Apple can be saved from itself. T-Mobile could give Apple access to the US and Europe.Apple could give T-Mobile some serious branding muscle. Not to mention, Apple could licence Fairplay for T-Mobile’s Sidekick. Remember the Sidekick is made by Danger,and the “Woz” sits on Danger’s board of director’s.hmmmmm?
Or Apple could say screw you and just partner with Dingo Bird in China and go for the largest market.
How fun…
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I run my business off of a Verizon Wireless phone. I use a headset with my phone. I have the headset on 6-10 hours a day.
I for one would love to have cell phone that combined a phone, a AM/FM/XM/Sirius radio, an iPod, and some simple PDA features with full bluetooth or USB connectivity to my Powerbook. Let me carry just one device wherever I go so I can leave my laptop at home while retaining connectivity and ability to work.
Verizon needs to get their head out of their ass. Verizon doesn’t sell a phone today that doesn’t have a camera on it. Yet they want to charge me 20¢ to download my pix, how stupid does Verizon think I am? Take a couple cents per song downloaded. 2¢ of a few hundred million downloads is still a substantial revenue stream. Take a few cents of any XM/Sirius subs that are sold and you have a revenue stream.
I pray that Verizon doesn’t buy MCI. While I like the wireless service, Verizon does not need to be any bigger.
To sum it up in one word, GREEDY!
ed: ” When is the last time you saw someone rocking out with a phone to their ear?”
Ed: They got these little doohickies that fit in your ear. Amazing invention. hOlding your radio to your ear went out about 1962.
You think people hold their ipod to their ear to listen to music?
The ability to combine a phone with a MP3 player isn’t new. Samsung had one offered by Sprint. It was a terrible MP3 player, and a lousy phone too.
Presently the PalmOne Treo 600 and 650 support MP3 playback (with an added SD memory card). I’ve put about 3 songs on my Treo 600, and never use it for MP3’s. I’d much rather use my iPod for this. It’s far better suited to the task of music.
And as odd as this will sound to wireless carriers… sometimes people WANT to be out of touch.
BriAnimations-
The main difference there is that once I’ve bought my drink, I can consume it anywhere I want. I have had a song stuck in my head before and not been near a computer, but that wouldn’t make me want it enough to pay three times the amount and only be able to listen to it on my cell phone. Your comments point out why an iTunes phone would work, and why what the carriers want won’t. Even when people pay that much for a ringtone, there’s a big difference because you don’t expect to use that ringtone anywhere other than your phone, so there’s no conflict. Besides, most people aren’t going to buy nearly as many ringtones as they do regular music purchases, so there’s no comparison.
Geo-
I just don’t see that happening, and I don’t think it’s a good idea. Apple doesn’t need to be in the cell providor business. The last thing they need to do is stretch themselves too thin by entering established markets with little benefit. There’s no way they could compete with the big boys, which is why there has been so much consolidation in the cell arena already. The costs in overhead, startup, personel, support- just not worth it. Apple should focus on their own existing markets and look at new emerging markets (they way they did with digital music) if they want to diversify. Motorola is a huge cell phone maker, and the iTunes phone will find a home. And when it does, the other carriers will start to add them over time because they won’t want to get left out. They may bitch and complain, but they’ll do it.