Does Apple need a mobile phone of its own design?

“Apple Computer Inc. Chief Executive Steve Jobs did his best on Wednesday to downplay his company’s first foray into the mobile phone market,” John Shinal writes for MarketWatch. “Jobs’ revelation that Apple will replace its most popular iPod with a newer, sleeker model essentially upstaged his expected news about the new iPod-equipped phone from Motorola Inc.

Shinal writes, “Yet the question of whether Apple should partner with handset makers, as it did with Motorola on the ROKR phone, or build its own product isn’t about to go away. Whether Apple’s strategy to just put software on someone else’s phone — rather than build its own — will be enough to defend its market-leading position is the subject of fierce debate among analysts. ‘If Apple pursues more relationships like the Motorola one, it will have missed an opportunity,’ said Gene Munster, a Piper Jaffray analyst and long-time Apple bull who rates the company’s shares ‘outperform.’ Munster concedes that Apple will get massive exposure from the arrangement, with Motorola and cellular provider Cingular Wireless both launching massive advertising campaigns. That alone could be worth hundreds of millions of dollars in saved marketing expenses for Apple. Yet it appears that Apple is not getting paid a royalty for each phone sold, according to Munster, although the financial details weren’t disclosed and Apple, Motorola and Cingular have refused to comment on them. ‘From a revenue standpoint, the phone is a non-event for Apple,’ Munster said.”

“Does Apple really want to become a phone maker in competition with Nokia and others? Probably not,” Shinal writes. “Much more likely, Jobs has learned from history and has decided to play with the handset giants, rather than against them. Now, if he could only find a way to get paid for doing it.”

Full article with much more, highly recommended, here.

Related articles:
USA Today: Motorola ROKR iTunes mobile phone provides ‘snazzy’ first impression – September 08, 2005
NYT’s Pogue: Motorola ROKR iTunes phone ‘great-sounding, reasonably priced and a lot of fun’ – September 08, 2005
Apple’s iPod nano will make competitors whimper, Motorola’s ROKR inexplicably bland – September 07, 2005
Tech pundit Enderle: ‘iPod Nano is a hit,’ Motorola ROKR ‘simply doesn’t have enough Apple in it’ – September 07, 2005
Apple announces Motorola ROKR iTunes phone, Cingular partnership, iTunes 5 – September 07, 2005
Apple, Motorola & Cingular debut world’s first iTunes mobile phone – September 07, 2005
Motorola ROKR Apple iTunes mobile phone availability dates for Europe, North America, and Asia – September 07, 2005

31 Comments

  1. “The carriers are the big players and the phone makers are just puppets…”

    Agreed. This is why Apple needn’t get any closer to the cell phone market than it has. Ultimately, that industry is about networks and signals, and frankly, they all suck. Imagine how Apple would be scoffed at because their phones dropped calls (like all the others).

  2. And AP has a news item out today about the introduction of the ROKR phone and the Nano… and they called the ROKR phone the “iPhone”. What dorks. I think that name is reserved for the Apple-branded phone, yet to arrive.

  3. I’m attaching my nano to my RAZR with slick little clips that are nearly invisible, using a nano mockup for size. Together they’re smaller than the ROKR and you can unclip them easily. Magic!

    MW-place, as in- there’s a place for everything.

  4. There may be more strategy involved here than we think on Apple’s part. Perhaps they didn’t want the iTunes phone to be as cool as the RAZR because, although having iTunes and some music on your phone is nice, it’s still not an iPod. I don’t think Apple wants to make phones. Maybe their strategy is to give people a little taste of the Apple experience by putting iTunes on these ugly ROKR phones. This pushes people to an iPod in two ways, first because once they get used to carrying around some of their music with them, they’ll probably figure out how cool it would be to have most or all of it, so they buy an iPod. Second, once people start using iTunes to buy their music for their phone, if they decide to buy a DMP, it has to be an iPod.

    I’d be willing to bet that Apple had very specific plans for this venture, and things that may seem like short comings (ugly, un-Apple-like phone with very limited memory) were things that Apple insisted on.

  5. Well I’d love an iPhone — I was looking at my (non-Mighty) Apple mouse and thinking, “hmm, just stretch this a bit and it would make a mighty handsome communications tool…”

  6. Crouching Tiger, Hidden Longhorn

    Shouldn’t you have become Crouching Tiger, Hidden Vista?

    I thought hidden vista would sum up Microsoft rather well. ie they tell you there is a vista but actually do all they can to hide it from you.

    Only Apple gives you the full 360 degree view.

  7. I agree that there are enough phone makers out ther. However, i want an iPhone, not to replace my iPods. I want a functional phone with an OSX operating system, which has Address Book, iCal, Mail, iPhoto and iTunes, for a few songs.

    i want it to bluetooth sync with my iBook and i would like it to LOOK like a Mac product, not the pile of sh*%t we were shown on Wed.

    surely i am not asking for the impossible ?????

    Hugh

  8. Apples needs to do something. The new iTunes phone is butt-ugly. There will have to come a day when Apple has a hand in the inevitable convergence of technologies. One small, cool looking device to do everything. That’s where we’re going. Only Apple can do it right.

  9. Ron,

    There you go. Get into the iPod accessory Biz. Design, make and market a nano-clip for attaching a cell phone to your iPod nano.

    On second thought, take the idea to Belkin and watch the royalties roll in.

    On third thought, forget it, I have an urgent email I have to send.

  10. I frankly could care less about whether an Apple iPhone has iTunes, but I would love a cell phone pda combination with as many productivity features as OSX can provide.

    I don’t use cell phones or PDA’s for entertainment, can’t even fathom those who have time for it.

  11. First, there is no iTunes phone. It’s a Motorola/Cingular phone with iTunes capabilities.

    Second, this is not about Apple getting into the phone market. This is about making new paths to iTunes, and ultimately to iPods. Apple give Cingular a bit of cool in exchange for Cingular’s customer base.

  12. Clamshell. One side is a Nano. The other a RAZR. Separate battery in each OR don’t allow iPod on when power below 20% to keep standby time.

    The interesting thing about this is that we’ve all been so disappointed by the Motorola phone we’ve missed the really significant thing here – rather than being an Apple phone on the Cingular network (like the HP iPod) this is the FIRST time Apple have licensed anyone3rd party to make a device capable of playing iTMS DRM songs or that will sync with iTunes – and that is significant no matter how disappointing the device.

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