Verizon, Sprint, other wireless companies balk at carrying Apple’s and Motorola’s ‘iPod phone’

“[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.

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35 Comments

  1. 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…?

  2. 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.

  3. 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

  4. 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.

  5. 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.

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