So who’s really delaying the Motorola iTunes phone anyway?

“While all parties agree that music + cell phones = huge money, putting the elements together to everyone’s satisfaction seems fraught with conflict,” Scott Moritz reports for The Street. “The acrimony was on display last week when Motorola rocked the annual CTIA wireless industry gathering by canceling the introduction of Rokr, its Apple iTunes phone.”

Moritz reports, “Motorola originally said the iPod-inspired phone was ready but that company alone decided to delay the unveiling. Later, Motorola chief Ed Zander offered up the official line, saying that Apple actually prompted the delay so it could do a big launch when the phone hit the store shelves. But industry insiders and analysts say the real snag in the iTunes phone rollout isn’t a technical glitch, for a change — but a case of unfinished business deals. It seems the iPod phone promises to be a big opportunity, yet none of the principals has figured out how to slice it.”

“In one corner there’s Apple. The much-admired tech shop sold about 10 million iPods last year. Massive, to be sure, but nevertheless it’s dwarfed by the 700 million cell phones that will be sold this year worldwide. To get a toe in the door of this market, Apple licensed its iTunes music library system to Motorola,” Moritz reports. “The risk for Apple is that Motorola’s Rokr could cannibalize the iPod business. Also, the iPod crowd uses PCs to download music currently and may not want to buy songs a second time over their phones. So if the telcos push their hands and demand a cut of the song purchases, it could weaken Apple’s iTunes music downloading business.”

MacDailyNews Take: As we understand it, the Moto phones will act just like iPods and would sync with your Mac or PC. Users wouldn’t have to buy songs a second time to hear them on their phones and that concept would obviously be dead on arrival with customers anyway.

Moritz continues, “Then there’s Motorola. As the No. 2 cell phone maker, having sold 108 million handsets last year, Motorola would love to add another hot model to its lineup and make a run at No. 1 Nokia. The risk for Motorola is that Apple could severely restrict the music storage capacity on phones to limit Rokr’s threat to iPod. And finally there are the telcos like Sprint, Cingular and Verizon Wireless, which look at music as one of the big revenue engines set to drive data service sales over newly upgraded networks. The phone companies, which saw little or no revenue benefits from the camera phone craze, are leery of being left on the sidelines of another big trend.”

Full article here.

MacDailyNews Take: Release the damn phones already, before we lose interest. Why does it seem that everything with which Motorola’s involved eventually turns into amateur hour?

Related MacDailyNews articles:
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

20 Comments

  1. I would say that “cannibalize the iPod business” is what is being the delay.

    What happens if motorola lunch future phones with 1 gig flash drives in there cell phones, or , a 4 gig mini hard drive in them ( weve all seen a mini…it would actualy fit in a cell phone. What happens to ipod sales then. They would take a hit, no question.

  2. Seriously, I could care less. I’m more interested in watching to see if Moto cuts bluetooth off at the knees again like they did with the Verizon v710 phone. Its only usable for a headset. No data transfer possible with that bluetooth stack. When asked why, they say it was because of VZW. We’ll see.

    And I agree with MDN’s take. Everything Moto touches turns into amature hour. Take the Razr for example. They hyped that phone as the latest and greatest, but look at it. It’s a smooshed v551.

    My take, I dont want moto to make an Itunes phone. They cant even impliment bluetooth syncing w/ isync. if they cant do that, what makes us think they’ll do the iPhone right?

    M/W: pay as in…the customers are going to be the ones to pay for Moto’s shazzbutty work and quality.

  3. “What happens if motorola lunch future phones with 1 gig flash drives in there cell phones, or , a 4 gig mini hard drive in them ( weve all seen a mini…it would actualy fit in a cell phone. What happens to ipod sales then. They would take a hit, no question.”

    protocol_J, that wouldn’t matter if Apple was making enough in their licensing deal per phone sold that it made up for it. I think Apple would have been better off getting Motorola or some other cell phone OEM to build an Apple branded iTunes cell phone. That would sell a hell of a lot better than a Moto branded one and Apple wouldn’t have to worry about a third party fucking up the marketing like Moto is doing right now…

    heh, magic work is “ball”. Yeah, Motorola just dropped it.

  4. My guess is Apple doesn’t want them to say we are going to sell this great phone in 6 months. because some of the public will decide to forgo buying a Shuffle or mini because they will just wait until it can be in their phone.

    I think Apple is making the right move on this they are the ones that have the most to lose by a bungled launch

  5. I’ll make you a bet…

    This “controversy” will be over just in time for iTMS’s second birthday on the 28th April.

    A lot of what has been written about over this subject has barely been credible from a logic point of view. Here in the UK, the networks work on the basis of minimum contract periods that are normally twelve months (for Pay Monthly contracts) which are re-instated every time you upgrade your phone: therefore, the key thing is to get Customer X to upgrade or “switch” to your network thus guaranteeing an initial or an additional 12 months of service income. Even on Pay As You Go, the basic business imperative is to get the customer to be on your network as opposed to any of the other three networks.

    Income from music is probably on network operators’ wishlists, but probably in two to three years time when 3G/UMTS networks are pervasive enough to make the concept practical and when they’ve moved over a significant portion of the user base to 3G/UMTS. Inventing artificial “marketing” led barriers that prevent customers from upgrading to UMTS is actually the worst thing that the networks could do at this time given the amount paid for licences (£20 billion in the UK alone).

  6. uhhhh… I can’t help wondering about the prospect of listening to my music on a cell phone….

    I mean… what kind of fidelity could one get from a cell phone?

    Certainly not the kind of fidelity you get from an iPod… Seems to me, it wouldnt be worth the effort… let alone, the price

  7. So whose fault is it that the telcos didn’t (and still aren’t) making cash off the camera phone craze? What a bunch of doofuses. All they would have to do is think out of the box a little bit. Why don’t they set up a a service where you can order prints directly from your phone really easily or pay a little to send pics to a “live frame” unit you have in your house or on your desk or something like that?

    As for the music thing, they could do something funky like maybe make it so you can subscribe to be able to stream your song to other phones so you could have members of the “song cells” all listen to the same music at once or something like that.

    How about being a little innovative rather than just trying to figure out how to scrounge profit from stuff others are doing?

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