“[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
Apple will probably have to go with T-Mobile to make this work. They will do anything right now to get an edge over Cingular, as they’re the only other GSM company in America right now. As far as people being dumb,if people are willing to pay $2.50 for an mp3 ringtone (which isn’t even a full song) then yes, they are that dumb. They aren’t smart enough to realize that they can compress an mp3 file, send it to their phone via bluetooth (which most, if not all mp3 phones have), and have a free ringtone instantly.
Mobile or cell phone plans in the US are like waaaay behind the rest of the world. What’s this both parties pay for a call shit? Why, if I receive a call, do I have to pay? What a crock.
Now, if they’re trying to flog a music service, for $2-3 a song, how many songs am I going to put on my phone?? Can I download them to/from the computer as well? Or can I download other (free) songs from my computer? Am I stuck with whatever I’ve downloaded for $2-3?? Is that it? C’mon – this will never take off, not in a big way anyway. If you can download a free song a month, with your plan, maybe it’ll go somewhere. There’ll be some hook for the gullibles for sure. But no-one will buy 100 songs for their phone, unless they’re crazy or stupid.
[As a comparison of normal phone charges – back in Australia, I had a great monthly plan. Basically, I owned my own phone, and so I only payed $5 a month just to have a connection. I paid for my calls, which was like AU 40c/minute – I think, it’s been a while. Anyway, I kept my calls short and infrequent, and my bills were around AU$15. Note that I didn’t pay to receive calls, so I could talk as long as I wanted if someone called me (or as long as they wanted.) Interestingly, I don’t have a cell phone here, basically because I refuse to pay $50 a month on a two year plan. My wife has one, but it’s a pre-paid thingo, b/c again, she doesn’t use $50 a month on it. We just don’t see the alleged “value” in it.]
Wow, Apple really opened a can of worms here. They managed to get in bed probably the two greediest industries around with one project.
I’m sickened by the telecom’s attitude here. We won’t work with your phone because it’s not going to give us the opportunity to rip consumers off even more? How about carrying it because people want it you bastards? Man, it really makes me want to dump my cell service altogether.
OK, WiMax iPods then.
http://www.cbronline.com/article_news.asp?guid=44A34C59-6F91-4287-A3D3-E147F1A9698B
I’m sure there will be people who like the idea of putting their music on their phones.
I agree that the carriers are getting greedy. They’re businessmen, it’s their job.
Question is will the consumer go for it. I personally balk at the idea of paying 3 bucks for a ringtone or a song for that matter. But there seem to be a lot of people who do download ringtones so why won’t they buy songs instead?
There are going to be two type of mp3 users. One set, like me, want their whole music selection and another set what only a few songs.
For the latter, this could be where the subscription based service really works. Maybe it would be better to pay $5 a month for your kids to get all the songs they want since fads come and go. No point buying a song when they won’t be listening to it in a years time. Only when they become a bit more selective in their musical taste will they probably want to buy the music they like and then the per-song model becomes more worthwhile.
This wouldn’t work for me, but it may work for many others.
Apple will need to adjust to market demand. The introduction of the shuffle is a good example that Apple do not want to give this away.
I use Verizon as my carrier. I won’t change becuase they will be competing with Apple, but I won’t buy into their service either.
OPERATORS DONT GET IT! THEY ARE DUMB BUNNIES. AND MOTO DOESNT GET IT … AND NEITHER DOES NOKIA. ONLY APPLE GETS IT
If you guys think that phones that play music are stupid, then fine.. but Apple’s only doing it to protect against what might be the only legitimate iPod killer..
DUH!
If it were up to Apple, people would just do what they do now..
The only problem is that batteries keep getting better, chips keep getting more efficient and drives keep getting smaller… So eventually, a phone (in your pocket) will be able to emulate an iPod experience (as long as it’s made by Apple, with a click wheel)
What don’t you understand?
Of course no ones seen anyone ‘rocking out to a cell phone’ because, well, this capability doesn’t really exist yet!
Have you seen people with an iPod AND a cell phone? That’s the target market.. a ton of people.
“Mobile or cell phone plans in the US are like waaaay behind the rest of the world. What’s this both parties pay for a call shit? Why, if I receive a call, do I have to pay? What a crock.”
I agree, and the idea that the phone companies can control or stop the convergence is nuts. They also make it hard to get your photos off ou phone onto your computer–they want you to e-mail via the phone the large file, and charge you by the kilobyte. They want to charge top dollar for slow, substandard internet service and it is not going to work.
If they don’t provide what consumers want at an affordable and reasonable price, someone else will.
I feel sorry for mobile phone users in the USA. In the UK mobile phones are cheap and the networks have price plans in place that everyone can afford.
I get 5 free text messages a day, my calls cost only a few pennies a minute, the person I call doesn’t pay anything and for every £10 I spend a week I get £5 free call credit.
All this and I am on a pay as you go phone so I just top up via the phone whenever I want to add credit. Even a camera phone with video is only £49.99 and it comes with £10 free call credit. I bought a high end phone and it was still under £100.
It’s becoming more popular here for people to not have landlines and just have a mobile phone at their house. I think it is disgusting that you let your phone networks dictate what phones you are allowed to buy. I heard that they even disable file transfer on some of your phones to make you download pics to the phone using WAP or GPRS and not directly from/to your computer.In the UK all the networks (since the late 90’s anyway) sell as many phones as possible and make them as cheap as possible, whoever has the cheaper tariffs and the better choice of phones is the winner. I think the consumers need to start voting with their wallets, buy the phones fully featured off-network and deny the phone companies their commission.
Yesterday, after reading the MDN news item and linked Business Week iTunes phone story, I e-mailed a brief and curt message to the Sprint PCS Business unit’s customer service address. This morning, I received a VERY interesting, but somewhat cryptic response that could be an indication that someone inadvertently let forthcoming news out of the bag.
My original e-mail to Sprint PCS:
FYI: I will NEVER subscribe to a Sprint music download service. I want Apple iTunes compatibility for music and full computer connectivity. Get onboard with this or I’m out of here…
Sprint’s response:
Dear George,
Thank you for giving me the opportunity to serve you.
Currently an external vendor offers the ringers and other downloadable items, which are available in the content catalog section on our PCS Web Site. We introduce new ringers from time to time on our Web site.
Whenever the Apple iTunes, will be launched numerous promotional offers and media should alert you of the changes.
I appreciate you taking the time out of your busy schedule and contacting us regarding Apple iTunes. Please know that I have forwarded your feedback to the appropriate departments.
We value your loyalty and look forward to serving you for years to come.
Camelia M.
Sprint Business eCare