Barron’s: Apple shares might be pressured due to wireless phone companies’ push into music

“Apple Computer Inc.’s soaring shares might come under pressure if wireless phone companies’ push to turn most cellphones into music players slow the sales growth of Apple’s hugely popular iPod digital music players, Barron’s newspaper said,” Reuters reports. “The newspaper said that by 2006, many new handsets will carry software, circuitry and data storage for portable music. It said this will let people download songs from personal computers, like iPods, but also download music over the air.”

“Barron’s said that while some analysts believe Apple might sell 45 million iPods next year, that pales next to the 750 million or more handsets that might be sold,” Reuters reports. “Apple is the No. 1 seller of portable digital music players, often called MP3 players, which let users carry thousands of songs on a device smaller than a wallet. Users of iPods include Britain’s 79-year-old Queen Elizabeth II.”

Full article here.

MacDailyNews Take: Apple might sell 45 million iPods next year, but Apple shares might come under pressure? Okay. Has anybody mentioned Apple’s deal with Motorola regarding iTunes mobile phones?

Related MacDailyNews articles:
Report: Apple and Motorola launch iTunes mobile phone on Tuesday – June 25, 2005
Cingular Wireless considering selling Motorola Apple iTunes mobile phone – June 24, 2005
Queen Elizabeth gets Apple iPod – June 17, 2005
Apple passed 20 million iPods sold milestone in early June – 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


  1. The article makes good points. At some point, iPods will face competition from mobile phones that play MP3’s, but only if these phones have an interface that is as easy to use and as intuitive as the iPod’s, and if they have music management software as good as iTunes. In my opinion, the iPod’s success is mostly due to iTunes. Digital music players existed before the iPod, but the iPod became a huge hit because it was the easiest to manage. That’s thanks to iTunes and the iTunes Music Store.

    As to Apple’s stock coming under pressure, that’s actually quite likely. The share price of most companies is driven by day traders, the mom and pop who dabble with the stock market on E-trade, and let’s face it, how many of them really know anything about the viability or profitability of the company whose stocks they fool around with? These are the folks who jump on the bandwagon or stampede for the exits on the say so of analysts, who then look like geniuses by issuing self-fulfilling prophecies.

  2. Apple might also take out full page ads telling everyone to fuck off. Mobile phone manufacturers might listen to them and stop putting music playing capability on their phones.

    magic word: might


  3. Cingular may prevent music on computers to be downloaded onto the new motorola phones and require you to purchase songs directly from iTMS to be downloaded into the music phone. This would require you to pay cingular monthly and per data bit rates. This way people get songs onto their phone and Cingular rapes the average consumer by forcing to do everything via their network.

  4. Looks like AAPL shares are down today – but on interesting news.

    Seems the down tick is due to a report by Creative that their mp3 players are seeing lower than expected demand. They expected to sell about $330M-360M this quarter but are now guiding to $300M. (See the story here:

    This is the same Creative that declared war on the iPod and had all sorts of talk about taking over the MP3 market.


    my magic word is “move”

  5. What’s with clearing my name and address in the feedback space?

    Back to the article: Does your phone run for 8+ hours while pumping out music? Mine can barely make it though the day if I talk more than 10 minutes. Another point: It’s the interface, stupid. It’s also the whole package from finding and managing music to playing it and playing with it. A cell phone pales to a laptop in these functions. Even the iPod doesn’t manage music.

    This is just a ploy by the cell phone networks to control a possible revenue stream. They’ll catch some of the market, but we’ll hate them for the way they’ll do it and it won’t be a net gain. In the end we’ll have less choice and less freedom.

  6. And just to clarify why Creative’s report drove Apple’s stock down – Analysts are insane some times. They see the Creative’s lower demand means that general market demand for digital music players is weakening. In reality, there are a few possibilities:
    (1) Digital Music Player market is softening
    (2) Creative over estimated their own sales in an attempt to bolster their marketing campaign and issue a sign of strength.
    (3) Apple/other competitors are taking Creative’s sales while the DMP market is strong.

    I believe it is #2 myself.

    My magive word is “members”

  7. The “idea” of convergence is nice– but it’s really convergence that works well that’s the key. If someone can create a machine that does everything AND it’s elegant to use, convergence will succeed. If the gizmo is a jumbled, hacked together geek-machine, it’ll make someone some money, but Queen Elizabeth (and my mom) won’t come near.

    MDN word: policy, as in “Don’t get arrested by the policy while converging your gizmo.” ” width=”19″ height=”19″ alt=”tongue rolleye” style=”border:0;” />

  8. Mobile phones have been able to play music almost as long as the iPod has been around (or longer?) with little impact. Apple will probably come to dominate that sector too with its iTunes Mobile Music and strategic partnerships with Motorola, Cingular etc.

  9. It occurred to me the other day that an ipod phone could have a rotary dial style mechanism combining the number pad and the scroll wheel. I miss rotary dial. It could then look pretty much like an ipod, no myriad of buttons, no stupid joystick/pad for navigation etc.

  10. Solution: Apple starts making mobile phones.

    What’s the difference between an iPod that makes calls or a Motorola that can play MP3s, eh?

    Bet they’d look a damn sight better than the rest, too!

  11. re/me: i vote for #2 & #3 and would add #4:
    apple’s stock is not totally driven by digital music sector. ipod/itunes contribute to it’s current premium (slightly p/e than most of its computer sector), but apple as become a little difficult to peg to a sector because it is truely an integrated market(s) company. look around how many do you see? analysts are at least as confused as we are.

    i see apple as posturing itself to be the 500# gorilla horizontal company, eating all the vertical companies’ lunch as they try to partner and merge. success will ultimately be won on user experience. ms’s dominance is nothing but a pimple in geological time as is the pc as we know it. apple’s vision is going to lift it to the top. staying there until next revolution happens and hopefully steve jobs legacy will be even smarter than him and see it coming before everyone else.

    the revolution we are in today is integration. there is still much room for expansion. i still have a different remote for the lcd-32 hdtv, dvi dvd player, av amp, hd satellite, & ipod. see the media center solution as the next big thing in integration. apple doesn’t have to be new, just the best. wonder if this is what they are announcing 7/7? and how does cellphone music players fit into this puzzle? apple probably knows.

  12. I don’t see the convergence here. I want my iPod to block out the rest of the world – my phone is to stay connected to the world. Just like Steve Jobs said about the convergence of TV and computers a few years back…The TV is for when you want to disengage your brain, and the computer is for when you want to engage your brain – not possible to do both at the same time.

  13. Obviously this guy didn’t get the word about Motorola and Apple’s deal with there new iTunes phone. I seriouly doubt the music phones will be competitively priced at 99 cents a song to where it would be worth it anyways.

  14. Does anyone think that the absurd little cameras attached to phones are actually reducing the sales of stand alone digital cameras ? No, if anything it is converting non-techies to digital photography. Same will happen with phones. This will actually increse MP3 player sales.

    Phone, e-mail and PIM treo is the extent of true functional convergence.

    Take this as opportunity to buy AAPL stock.

  15. I must be waaaay off base, but I tend to look at a company’s total sales and profits, and not some vague news about some other product. I think the fact that Apple was the ONLY computer company to have staggering growth while the rest of the industry languished in their own mediocrity.

    Add to that, Apple’s incredible history (see ), and I have absolutely no concerns over some third-party mobile phone which Apple is making a licensing profit from each one!

    Do you really think the people at Apple are so stupid as to not know what the potential financial results will be when they themselves assisted in the design of these devices?

    GET REAL!!!!

    To those that know Apple only through rumors, no amount of explanation will suffice.

    To those that know Apple via the Mac on their computer desk, no explanation is necessary.

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