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iTunes Music Phone Will Be Released This Week By Apple, Motorola

Posted on: Wednesday, 7 September 2005, 00:00 CDT

Sep. 6--The long-awaited iTunes music phone from Motorola Inc. and Apple Computer Inc. will be introduced Wednesday and could be in stores later this week.

Motorola's new phone, which will operate on the Cingular Wireless network, will be "the next generation of Swiss Army Knife cell phones," said Mitch Mitchell, an A.T. Kearney vice president, combining functions of Apple's iPod music player with voice, messaging and other cell phone features.

Other mobile phone makers, including Nokia, Sony Ericsson and Samsung have either introduced music phones or plan to do so soon, but Motorola's version--based on Apple's pioneering and popular iTunes format--has generated the most interest.

Schaumburg-based Motorola earlier this year signaled an iTunes phone announcement but backed away at the insistence of Apple, which traditionally announces new products shortly before they are available in stores rather than months in advance as is common in the wireless phone industry.

Industry analysts expect that music phones will follow the path of camera phones, which now account for about half the cell phones sold.

"The first wave (of music phones) will go to folks who have to have the latest gadget," said Mitchell. "It'll be similar to camera phones. Over the next 18 to 24 months, as volume grows and prices fall, they'll become widespread."

Launching an iTunes phone is seen as a major plus for Motorola, which has enjoyed a resurgence in mobile phone sales with the success of its ultrathin Razr phone and other stylish models.

"Clearly, Motorola is really coming back to its roots as an industry innovator," said Rene Link, vice president at inCode, a wireless industry consultancy. "For a while, they'd lost the innovation lead to Nokia, but with the Razr phone, they regained it, and this iTunes phone keeps them in the lead."

While the benefits of a music phone to Motorola based on Apple's platform is clear, the benefits to Cingular or other wireless carriers have been less so.

Customers can use music phones in ways that bypass carriers by downloading music onto them directly from home computers. Whereas wireless customers use camera phones to send images to one another, music phones may not encourage more network use by consumers.

While the iTunes phone probably won't directly generate a lot of new revenue for Cingular, it may help reduce customer turnover or "churn," said Albert Lin, an analyst with American Technology Research.

"Buyers of iTunes and iPods are the future ideal customers," said Lin. "Carriers will do everything to reach out to them. For a high-churn carrier like Cingular, this could be a good way to reduce churn."

Lin said he doubts that the first generation of music phones will have huge impact on any of the companies, but that future generations of the technology will.

"Motorola has greater aspirations in music than just iTunes," he said.

While marrying cell phones and iPod music players "is a fairly big deal," it will probably take a while before all the bugs are worked out and the product really catches on, said Neil Strother, mobile devices research director at the market research NPD Group.

"It's a no-brainer to do this but whenever a new device comes in, every first generation has issues," he said.

One concern may be battery life, he said. Users of both mobile phones and iPods have noticed how often they must recharge their batteries to keep the gadgets operating.

"I know the engineers have been working on this for years but by adding cell phone function to iPod function, you wonder how long the batteries will last before they need charging," he said.

"But regardless of the kinks we may see, if they have the right device at the right price, I think consumers are going to like it."

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Source: Chicago Tribune

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