Analyst: Apple will transform iTunes, allow over-the-air iPhone downloads within the year

Apple, Inc. will transform iTunes into a wireless service for the new iPhone, or create a wireless offshoot of the popular online music service, within the year, Pike & Fischer predicts in a new report.

Apple will have to take such a step to remain competitive, as consumers will increasingly demand the ability to download music and video clips over the air, the Silver Spring, MD-based company argues in an analysis of the U.S. mobile broadband market.

“Consumer expectations will advance to the point where they will eschew reliance on a PC and cable to get content onto their iPhones and other portable devices,” says Pike & Fischer Senior Analyst Tim Deal, lead author on the report, in the press release. “Apple will therefore be forced to offer over-the-air downloads to remain competitive.”

AT&T, the exclusive distributor of the iPhone, has launched its own music download service for its wireless customers. But that service does not work with the Apple device, which hit the market June 29. AT&T rivals Verizon Wireless and Sprint Nextel also offer music downloads for their customers.

The report also predicts that Apple will have to revisit its pricing strategy for the iPhone, which can run up to $600, after the device has been on the market for a few months and demand starts to fluctuate. Additionally, Verizon Wireless is likely to launch an iPhone alternative, in collaboration with a handset manufacturer such as Samsung, in time for the 2007 holiday season, according to the report.

Pike & Fischer, a BNA company, offers a host of legal and business products covering the telecommunications industry. This new report, U.S. Mobile Broadband Services – 2007 Competitive Analysis and Strategic Outlook (US$799) is available at www.broadbandadvisoryservices.com.
All of the components are seemingly in place for such a service – if Apple wants to go in that direction.

31 Comments

  1. @ Mikey…

    I’m gonna be in Guadalajara and in Cancun on August 18th – 28th…Any suggestions for free wifi? I plan to travel and document my expierence with my iPhone in Mexico…similar to my documentary in Las Vegas, the weekend of the initial release.

    gracias!

    iPhone in Vegas

  2. Apple is rarely first to market with a new product or service…they are usually just first at making those products and services amazing. They will come out with streaming iTunes when they’re ready…and continue to bury the “competition”.

  3. My MBP is much snappier after the server upgrade!!

    Another analyst who doesn’t get it. Comparing other music download sites to iTunes is not a good for their clients. Look at all the iPod/iTunes sites that offered downloads that were touted as competitive by analsts. Most are bankrupt or hemoraging money. Apple has iTunes and no one else does. Therefore; Apple wins!

  4. I’m not so sure that people are clamoring for this just yet. It sounds cool and seems like a logical next step, but except for teens who are willing to pay ridiculous prices for ring tines, how many really need to download Kelly Clarkson or Dude, Where’s My Car? while on the way to work?

    This kind of seems like a solution with no real problem (a la M$) and also diverges from tethering people to iTunes on their home computer.

    I don’t buy it.

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