Citigroup tech analyst: Apple ‘iPhone’ is going to be a category killer

“Perhaps the biggest threat to Apple Computer Inc.’s iPod and the portable music player industry is a device already nestling in a billion pockets: the mobile phone. Sales of cellphones that can store and play back music are climbing, raising hopes among handset producers like Sony Ericsson and Motorola Inc. that it will be their next growth driver. Music phones may never kill off the market for the stand-alone music players of Apple, Sony, Samsung Electronics Co. Ltd., Reigncom Ltd. and others, but they could dent the market’s potential,” Nathan Layne reports for Reuters.

“Apple controls 55 percent of the global MP3 player market and has a 70 percent U.S. market share. It also reaps profits from the millions of songs sold through its iTunes online music store,” Layne reports. “But its battle with the cellphone threat continues. Motorola launched handsets late last year that play digital music files supplied by Apple’s iTunes, but a low storage capacity and bulky design have cramped sales.”

MacDailyNews Note: The newest Motorola iTunes phone, the SLVR, isn’t bulky (it’s thinner than the RAZR), but still suffers from the artificial 100-song limit.

Layne continues, “Still, Apple has a powerful market share weapon in its more advanced video iPod’s and is by no means sitting on its hands. And Kirk Yang, a managing director and technology analyst at Citigroup’s Asia Pacific operations, reckons Apple will likely come out with an iPod that can double as a cellphone later this year to counter the music phone offensive. ‘The iPod with phone functionality is going to be a category killer,’ Yang said at the Summit in Hong Kong.”

Full article here.

[Attribution: Macworld UK]

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Related articles:
Review: Motorola SLVR Apple iTunes mobile phone ‘an incredibly slick gadget with some shortcomings’ – February 13, 2006
Motorola and Cingular launch new SLVR L7 iTunes phone – January 31, 2006
Analyst sees new Apple iBooks by April, ‘media hub’ product, 1GB iPod nano, iPhone within a year – January 31, 2006
Analysts tackle Apple’s ‘Mobile Me’ patent, iPhone rumors, MVNO possibilities – January 19, 2006
The San Francisco Chronicle: Apple may link cell phone, iPod – January 17, 2006
Apple Computer getting into the mobile phone market? – January 12, 2006
Apple applies for ‘Mobile Me’ trademark – January 11, 2006
Morgan Stanley predicts Apple shares surge, Apple ‘iPhone’ in 2006 – December 16, 2005
Analyst predicts Apple-branded ‘iPhone’ with iTunes and terabyte iPod within five years – November 11, 2005
How Apple’s Steve Jobs snookered the entire cell phone industry – October 03, 2005
Motorola CEO Zander: Apple to build a smart phone, it’s only a matter of time – September 29, 2005
Apple may eventually introduce its own ‘iPhone’ cell phone-iPod combo and create Apple MVNO – September 12, 2005
If Apple isn’t working on their own iPhone, they’re making a stupid mistake – September 12, 2005
Does Apple need a mobile phone of its own design? – September 09, 2005
Piper Jaffray: Apple should develop ‘iPhone’ by themselves – September 06, 2005
Forbes: Apple Computer planning to become a phone company? – July 08, 2005
Wendland: Bill Gates is right, iPod will be replaced by smartphones – by Apple – May 13, 2005
Apple Registers iPhone Trademark in Australia – December 02, 2002


  1. Remember the old rotary phones? Imagine something similar to that appearing on a touch screen.

    How about one with a crank handle like the one I had in Donegal, Ireland, when my number was 35, and if I made a call in the night I had to wake the owner of the only store up!

  2. I’m waiting for a direct cerebral link before I upgrade either my phone or iPod or PowerBook.

    Long live the PowerBook brand! Say NoBook to MacBook. Honestly, what’s wrong with PowerBook, it’s still a great name, unlike i-this and x-that. That naming convention is so 20th century. PowerBook is timeless.

    When I inevitably get a MacBook (blah!) Pro, I’m going to cut off the name plate of my PowerBook G4 and stick it over MacBook (ug!) Pro. I’m going to scratch the name off and burn the shavings.

    Steve, why, WHY?! At first I was ok with it, but now… I think Steve’s ego is starting to run away from is better sense. First MacBook, then iBoom, or whatever that monstrocity is called. Choose your press events wisely.

    Where’s my new iBook, Steve? The i in iBook makes sense now that it’ll have an Intel processor, but they’ll probably change the name to BarneyBook or something lame.

    Let the “INQ” print that rant!

  3. There will be no iPhone</b>

    The cell phone market is saturated and extremely competitive, Apple likes to develop new markets and control them as long as possible.

    The carrier companies are the major players, the phone makers kiss their @$$es, that’s not a place Apple (really Steve Jobs) wants to find itself.

    People invest in a product and it takes time for them to switch. Look how hard it is to get Windows users to switch to a Mac.

    Even if the Mac faithful run out and buy a iPhone, there already are devices that will play iTunes on a phone. The option for the iPhone has been handed to us already.

    Ok after all that comes these problems

    1: Battery life. I talked to others who need their phone to be a phone, not to drain the battery listening to music.

    2: Music selection. Carrier companies want to charge many dollars for each song to make a profit, not a mere 99¢ loss leader to sell a device a customer already owns.

    There is no market for a iPhone, and Apple, in it’s usual fashion, would make some f-ugly white plastic throwback design model from a 1960’s era wannabe futuristic 2001 Space Odesssy crap.

  4. Who’s is going to market the iPod Phone? Not Verizon. Sprint? not likely. They have partial deal with Cingular so that might work.
    With so many of the cellular companies trying to go into the music business as well, an Apple phone may have a tough time getting into the market.

  5. this raises the question: would it make more sense for Apple to make both a phone iPod and a video iPod or one device that does both?

    Somehow i think MDN’s idea of an iPhone shell into which you can drop your nano makes sense but Apple rarely forgoes an opportunity to sell people a new iPod. As such i think that a new iPhone (iPod w/ phone features) could keep the nano’s size, but obviously could not do video on such a small screen.

    Maybe a slim iPhone iPod w/ 4 GB flash drive at around $299 and a full blown video iPod with iPhone built in and a 80 GB HD at $499?

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