BusinessWeek: What’s going on with the Motorola Apple iTunes mobile phone?

“It seemed like a sure thing: the iPod mobile phone. What could be more irresistible than a device combining the digital-music prowess of Apple Computer with the wireless expertise of Motorola? Motorola sent its buzz machinery into overdrive in January when it leaked word that the product would debut at a cellular-industry conference in New Orleans in mid-March,” Roger O. Crockett writes for BusinessWeek. “Well, hold the phone. At the New Orleans confab, a frustrated Edward Zander, Motorola’s chief executive, stood before a roomful of analysts and reporters and said the handset’s debut would have to wait.”

“Why? Zander said Motorola and Apple want to hold off until the phone is closer to hitting store shelves. But three industry sources say a lack of support from such giant cellular operators as Verizon Wireless and Cingular Wireless was instrumental in delaying the unveiling. So far, the wireless companies are reluctant to promote the Motorola-Apple phone,” Crockett writes. “Behind the clash are two very different views of the future of music on mobile phones. Motorola and Apple would let customers put any digital tune they already own on their phones for free. That would help Motorola sell more phones, and it would help Apple expand its dominance of digital music. Verizon, Cingular, and other wireless operators want customers to pay to put music on phones.”

“One insider says that even if Cingular and Verizon, the two largest wireless players, won’t sell the Motorola-Apple phone, smaller rivals, such as T-Mobile, may peddle it to gain ground on the industry leaders. Motorola says it’s working out ways for carriers to profit from digital music, and it expects to launch the phone with that support this summer. Motorola and Apple could also bypass carriers altogether and sell the phone via retail stores or their own Web sites,” Crockett writes. “Trouble is, that would mean no carrier subsidy on the handsets. So customers would have to foot the music phone’s entire bill, expected to be around $500. “Who wants the $500 iPod phone when you could buy a phone and an iPod for that much?” says analyst Tole Hart of researcher Gartner. A sure thing? The iPod phone now looks anything but.”

Full article here.

MacDailyNews Take: The saga continues, unfortunately.

Related MacDailyNews articles:
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


  1. It’s not dead. Apple is aware that the market is headed this way and they will have to compete. The cell phone industry debuts new products way before actual release. I think they are worried that would give the competition a head start. Also the cell carriers are getting worse than record companies in the greed department. They want to charge you for the phone, the minutes, data, ringers, wallpaper, and now music. They got burned on camera phones because they chouldn’t charge people for every photo they take.

  2. Apple may have realized a smartly done phone could be a major threat to the iPod. 20 Gig of music on a mini-drive, and play is interupted when a call comes in. Pick it up and speak to your caller though it’s mic, but leave your earbuds in. Calls over? Your song resumes. Sweet.

    1 device in your pocket instead of 2.

    Add your calendar and address book and you’ve replaced PDAs as well.

    Apple should build and market it themselves (Motorola hasn’t got the design sense). So what if its $500? The yuppie-snobs will buy it first, and it will be affordable to the masses by the 3rd or4th G . By then phone companies will discount them to get more customers, because it’ll be the next hottest thing on the planet.

    Kinda like the iPod story itself. C’mon, Apple!

  3. What’s iTMS without the iPod?
    – It’s pretty much just another music store. The iPod pushed a lot of iTMS sales. Marketing the exact opposite (minus the iPod) might prove much more difficult.

    For me, it’s iPod (minus iTMS). iTMS doesn’t interest me at all in its current form, and it will *not* push me to buy a Motorola iPhonePod.

  4. What’s iTMS without the iPod?
    – It’s pretty much just another music store. The iPod pushed a lot of iTMS sales. Marketing the exact opposite (minus the iPod) might prove much more difficult.

    For me, it’s iPod (minus iTMS). iTMS doesn’t interest me at all in its current form, and it will *not* push me to buy a Motorola iPhonePod.

  5. It’s the Monopolists (celular carriers) vs. the Creators (Apple, Moto, and others). They approach the world in different ways. Monopolists look to squeeze every available nickle from their invested capital, thus their “what’s in it for me attitude on the iTunes phone”. Creators look to the customer and say; “what can we do that’s exciting for the customer to make their life better, and at the say time sell a ton of the service or device”.

    Ultimately the company centric approach by the Monopolists make them vulnerable to being swamped by new technologies. I.E. the cell companies will soon have to live in a world of inexpensive mobile VOIP that will pull the rug out from under their current business model.

    In the future customers will choose in droves to go to companies that deliver phones with great services such as picturephones, iTunes, and flat-rate pricing. In the meanwhile the Monopolists will look around a few years hence and wonder what to do with businesses wiped out by a technological Tsunami.

  6. Seriously. The cell companies want the device locked down. Thats why they lock their gsm phones. Its actually quite surprising, but its mostly American cell companies that are sporting this attitude.

    Take for instance Verizon. they got a great phone in the moto v710. But what did they do? They told moto to chop the bluetooth stack to ONLY supports headsets.

    Why? Verizon wanted to sell customers data transfer. They wanted people to do it through their RIDICULOUS site.

    TMobile, Orange, O2, all the rest of the Euro carriers will probably carry the iPhone, and it’ll be unlocked. Their stance is one of, we provide you the best phone that fits your lifestyle, and we provide the minutes to use it. Everything else is up to you.

    I like that, as opposed to the US carriers who think that ALL our needs should go through them and they should be able to charge us. If this keeps up, I will cancel all my Cingular phones with a letter to the CEO stating why, and take all my lines to Tmobile.

  7. “Monopolists look to squeeze every available nickle from their invested capital”

    Everyone in business, including Apple and Moto, looks to squeeze every available nickel from their invested capital. No one stays in business by giving away “happiness”. The telcoms are in this equation because they bring something to the table, and their employees should be confident that their work won’t be given away for free. I agree w/TheRealist on this one – Apple & Moto should take the plunge on this. If the product is good enough, people will buy it. If it’s sub-standard, they won’t.

  8. Retail Boy and Bishop are right. It’s the difference between Apple DRM and Janus. Between ITMS/iPod and Plays For Sure.

    Insanely Great products fill a consumers needs. What these large companies want is a revenue stream and they really don’t care about the end user.

    By its very nature advances in technology are cutting out the providers, the middleman.

  9. Congratulations to BusinessWeek. For the first time this sets out the reason why the carriers are unlikely to be enthusiastic. The situation in the UK (and possibly elsewhere in Europe, since the same carriers operate in most markets) is even more dramatic than in the US. One popular pricing model is to provide the handset “free” in a term contract package,usually for a minimum of twelve months. The aim is to drive usage of the network, which equates to market share.

    So the question is what does the Moto/Apple handset offer them as a sales incentive, or as a network traffic generator? It might sell contracts, but unless it offers a facility to buy over the telephone from iTMS or an AAC compatible mini-store, it will not generate any network traffic. DRM may make it difficult to sell the option of sending an iTMS track over the network to another user, which could be another traffic generator. If all that is offered is a phone with a capacity to hold and play a part of your iTunes library, then I can see the networks being unconvinced about what it offers them.

    But there is on the other hand no reason for the networks to follow the Apple iTMS pricing model for phone downloads, if they can set them up: here they are competing with ringtones rather than PC downloads, and can legitimately claim that this is a premium service, and perhaps clear another $1-$2 a download.

    It will be interesting to see how the business models play out.


  10. The real question to me is is how did this project get so far along before it was cancelled?

    Why weren´t all the problems or situations explored, discusssed, argued over before it got to about 8 hours before a huge, major launching of this Motorola ipod phone product?

    I guess the only way to find out is talk to the people at Apple and Motorola that were shown the exit to door (as in “you´re fired”) when this Motoipodo was ashcanned.

    (I vote for the Steve got cold feet when he realized it would kill off his iPod sales – who wants to carry around an ipod and a phone if you can have it all in one!)

  11. See if BMW/Merc want to sell the phone integrated into the car. They require you to pay the full amount for the phone. After you buy it, you have to go to your carrier and enable it.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.