“The iPod shows why Apple Computer is a great company. With elegant hardware and friendly software, Apple’s portable player made a profitable business out of digital music — a trick that had eluded record labels and such erstwhile leaders as Sony, Microsoft, Real Networks, and Napster,” Bill Alpert writes for Barron’s.
“Some Apple bulls argue that the shares could go 50% higher, noting how Apple has held its turf against the “iPod killers” of Sony and the digital-music schemes of Microsoft. Little noticed by these iPod zealots, however, is a looming threat from overhead with a footprint as large as the continent: Wireless phone companies are teaming up with the music industry to make most mobile phones into music players,” Alpert writes. “In the last year, the iPod has become Apple’s best-selling product, bringing in a third of revenues for the Cupertino, Calif., firm. The iPod ‘halo effect’ has lit up interest in Apple’s Macintosh computer and Apple’s stock.”
“[High] expectations [for Apple] don’t seem to take into account the coming year’s introduction of music-player cellphones,” Alpert writes. “…if handsets become good enough music players — says Jeffrey Hallock, marketing vice president for Sprint — how may people will want to carry two devices? Along with their wallet, after all, the thing people always carry is a cellphone… For sure, Apple hasn’t stopped innovating. The next versions of the iPod will reportedly feature Wi-Fi connectivity, allowing podsters to engage in super-distributing to their friends. Motorola stands ready to announce handsets that tap into iTunes.”
Full article here.
MacDailyNews Take: “Motorola stands ready to announce handsets that tap into iTunes,” is all Alpert writes of Apple’s move into mobile handsets, but it is perhaps the most important line in his long article. The article concludes with a quote from Musiwave chairman Gilles Babinet (Musiwave is a full-track download service, under contract with 34 telephone companies worldwide) who actually claims to be Apple’s main rival and predicts that Apple’s share of the digital music business could shrink from 90% to just a few percent. “They may be in a dead-end strategy,” he says of the iPod. Keep dreaming, Gilles.
Related MacDailyNews articles:
MacDailyNews Exclusive: Leaked images of Motorola Apple iTunes phone? – June 29, 2005
Apple iTunes phone image shown by Motorola execs in Beijing? – June 28, 2005
Apple’s iTunes 4.9 contains many hints of iTunes music phone – June 28, 2005
Cingular Wireless considering selling Motorola Apple iTunes mobile phone – June 24, 2005
Motorola CEO: Apple iTunes mobile phone on track for July debut, carriers not balking – May 18, 2005
Motorola expects to launch first Apple iTunes phone this summer, second iTunes phone in 4th quarter – May 11, 2005
Motorola’s Apple iTunes phone software screenshots posted online – May 11, 2005
Will cellphones eat Apple’s iPod or vice versa? – May 09, 2005
Bona fide Apple iPod killer? Nokia’s 4GB mobile ‘jukebox’ phone due by Christmas – April 28, 2005
Can mobile phones and telecoms kill Apple’s golden iPod+iTunes combo? – April 26, 2005
Motorola CEO Zander: Apple iTunes phone due ‘in the next few months’ – April 20, 2005
RUMOR: Apple’s iTunes Mobile 1.0 to be ready by June – April 20, 2005
Verizon, Sprint, other wireless companies balk at carrying Apple’s and Motorola’s ‘iPod phone’ – April 19, 2005
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
Nokia to use Microsoft’s music formats on its handsets – February 15, 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
yawn…..
wow, really? ANOTHER ONE….
look, there’s something to be said for dedicated devices. So what, if my iPod battery dies, i can’t listen to music. If i’m listening to music and my other device dies, now i can’t listen to music AND i can’t make phone calls.
I don’t want to play video games on my mac…i want to do that on my PS2, or whatever. I’m all for dedicated devices.
g
Although carrying one piece of hardware is good, I can’t imagine carrying my cell phone and listening to iTunes while on it and getting a call. It would be worse than call waiting. I don’t always want to be connected so I don’t ALWAYS carry a cell phone. I prefer to compartmetalize my fun. Talking and Music don’t always go together.
Musiwave? Huh? What?
First of all i already carry the two devices and it doesnt bother me. Then, the iPod phone is a great idea, but lets be real, it wont have 20gb and the battery wont last that long, then if i have an accident i wont have any battery left because i used it up listening to music on my phone.
So the phone is a great idea in a near future when cellular phones will be charged over your carriers network and when toshiba or any other hd maker can make a micro size 10gb hard drive.
So for now i will proudly carry my Motorola Phone and my Apple Ipod, SEPARATELY.
Do people REALLY want to buy music over the phone?
I mean come on, I can see the convenience of talking about a cool new album with a friend and then grabbing it out of the air. But not only will this process be slow, it just won’t be what I’d rather do. I want to download tracks and albums and then move them around into paylists and have the ability to manage them FROM A COMPUTER, or if not a computer as we know it, (say a home media server device instead), atleast I don’t want to do it from chicklet keys on my cell phone as the battery drains.
There is NO QUESTION that for people who don’t have an MP3 player or don’t have a high capacity one, that getting one for “free” integrated into their next cell phone will be a boon for iPod foes.
But will it not just give them a taste for what it’s like to have music in their pocket? Will they not crave having their entire library with them when they walk out the door?
The people who use their Treo as a digital camera are people who otherwise would NOT have bought a digital camera or have a more expensive one at home they don’t use. The same will go for these music phones – even the iTunes one. At best they will be an integrated low capacity flash MP3 player. At worst, they will be a waste of battery.
My magic word is “stage”
“Rogers charges $1.25-to-$1.99 (Canadian) per song, with an additional dollar charge for dual downloading to phone and PC. The first phone that goes with the service is a model from Nokia (NOK) that costs between $130-to-$300 (Canadian), depending on the calling plan. Neale says that when people try the Nokia phone with his Bose headphones, they exclaim: “It’s just like an iPod!”.”
I still believe listening to music is better with an iPod. The American wireless companies only want to make more money and will ultimately charge too much for music downloads and drive away most of the potential subscribers. The “right” to transfer their music to your computer or your music from your computer to their handsets will cost you even more money.
Stick with the iPod and iTunes. Universal all-in-one seldom works!
Cell phones killed Palm, but the functions were so connected that merging the two made complete sense.
For the time ceing, I don’t see how the benefits of a single device outweigh the compromises (device size, battery life, etc.). This may change as chips keep getting smaller and batteries get better, but why do so many people assume that Apple won’t do anything to offer a product in that category?
Why the hell would I want to store my music on my cell phone? Why the hell would I want to use my cell phone to play music?
I can’t even turn the damn thing on in an airplane. My iPod is no problem, though.
Oh yeah, what’s the price for “ringtones” these days, anyway? Aren’t/weren’t they around the same price for a single on iTMS?
Hey, if I want to listen to music on my phone, I’ll call Dell Tech Support and listen to their hold music. Bwahahahaha!!!
low blow.
nice one though.
I predict the market share for that analyt’s ideas will shrink to a few percentage points. His wife and his dog.
And who is going to pay Cingular $2 for a song? NOBODY!
If anyone pulls of the phone thing, it will be Apple and whomever they partner with.
Prediction…Verizon and all the other cell companies doing their own music thing will have about as much success as the music companies themselves did trying it. They’ll all be wishing they’d have signed up with Stevie.
Mike R. wrote:
“Stick with the iPod and iTunes. Universal all-in-one seldom works!”
(hands raised before a grumbling crowd)
Friends, friends… Listen to him! He speaks wisely and true! Consider….
Would you buy a VCR/DVD combo player? If yes, what will you do should a tape become stuck in the machine? If the DVD drawer fails? The entire unit must be repaired! You could be deprived of your weekly viewing of “The Matrix”… “The Godfather”… Consider a family without access to their Disney videos! The horror!! Chaos would reign!
The best solution is to use dedicated devices for your entertainment and communication needs. iMacs and eMacs excluded…
Heed the words of Mike R. He speaks wisely and knows the proper way to serve roast crow!
I once owned a Palm Treo 650, which is supposed to be a phone/PDA/music player combination. What I got was a POS phone (bad RF strength, bad connections, poor sound quality), a POS music player (impossible to manage, bad sound), and a slightly less POS PDA (the Palm OS just plain sucks).
I want a phone that works as my top priority. So I bought a Sony Ericsson S710a, which is an outstanding phone. I bought myself a decent PDA (a LifeDrive, which finally has enough memory to do everything I want). And I have my iPod which is so easy to manage my music collection, all other players are a distant 10th place.
Maybe Apple’s iPhone (someday, I hope) will do it all right, but I’m not holding my breath.
There maybe a few people who think that music on their phone is a good thing. But they’ll be screaming because the phone part sucks or or the music player sucks. Probably both.
The history of business is populated by people who underestimated one company or another. These people who are pontificating about a phone/music player fundamentally misunderstand what makes the iPod what it is. It’s more than the hardware. It’s more than the store. It’s more than the software. It’s how all three integrate into one easy-to-use and fun experience. Those are just not words used often in the mobile phone industry.
It’s all about the carriers – they can’t muscle in on the action if you’re using your computer to put music on your phone or your ipod. But if they could convince the masses to download music from their handsets, they’d make a killing. I can see the dollar-signs spinning in their eyes while they promote the likes of Musiwave…
Too bad nobody’s gonna fall for it…
Le Tigre wrote:
“I can’t even turn the damn thing on in an airplane. My iPod is no problem, though.”
yet another supremely good arguement against an iTunes phone.
Hear ye, hear ye:
All Moto iTunes phones have separate power buttons for the mobile phone and the music player. Wha, so you think we’re that stupid not to think about airplane flights?
eh, personally I don’t have a cell phone and don’t want one. There are a lot of people like me out there. I guess the youngsters want the latest and greatest, but there’s enough people who would just buy the iPod only player still left.
It will work for some people, however if the phone co,’s charge a lot for a song, I don’t see it working.
Plus my iPod is used at work, using iTrip and in my car too. The phone probably wouldn’t do that, nor will it have the storage capacity needed since companies need to keep the phones as light as everyone wants.
I don’t think it’s an either/or proposition. This is wrong some people would love the convenience having all and sundry on their mobile (cell) phones. Other people want dedicated mp3 players. There are potential minuses and pluses for both options
Personally, I wouldn’t touch a phone for music. Give me an ipod (actually another one would be nice) anyday. I want a quality large mobile music collection. And I can’t see 10 – 20 gig flash cards on phones happening any time soon.
Mr. Zander
“All Moto iTunes phones have separate power buttons for the mobile phone and the music player. Wha, so you think we’re that stupid not to think about airplane flights?”
try to explain this to a flight attendant that doesn’t know the difference.
… if ….
Tempus Fugit-You are spot on right again. I would bet some of the cell phone makers and marketers didn’t either.
What happens when the cell phone battery dies on the plane trip. Can’t charge it. But my iPod will last the whole trip.
The cell carriers still do not know how to make smaller phones that get outstanding reception; something needed to download songs. I could imagine music downloaded to a phone that skips like an old phonograph record.
“Heed the words of Mike R. He speaks wisely and knows the proper way to serve roast crow!”
Tempus Fugit,
He also knows the proper foods for Pickapeppa sauce, pork roast and hamburgers. In truth, he is wise.
[Great party dip: mix Pickapeppa sauce with cream cheese. For those with delicate stomachs, serve with a tall glass of ice-cold Pepto-Bismol.]