Motorola + iTunes; things to watch

by @jehiah on 2005-03-03 01:50
Filed under: All, Articles

As the day draws near to a release of a Motorola iTunes compatible phone (ROKR), and rumors abound, there are a few specific things I am interested in.

Self Disclaimer: I proudly own apple stock, and am starting to quake in my boots because this is the last big news item due out before my March options expire at $47.50. In the past I have made some very wise decisions about Apple stock, but It might be at the top of it's peak until 2Q results are out in april. So please go push up the stock price =)

That in mind, these are what I believe to be the 'tells' of the Apple and Motorola deal.

Availability: Motorola has a history of announcing phones many months before you can actually purchase them. This is in direct contrast from Apple which likes to ad an aside with their anouncements of 'shipping today'. I think it will be some indication of how much influence Apple has, and how much they are getting out of the deal if the product ships (for specific carriers) in short order after it is anounced.

Over the Air Progamming: People are talking and speculating about some sort of radio with the iPod (be it FM or Satellite). What I believe may be a very real possibility is for the iTunes mobile version to purchase songs over the existing 3G cell networks, and sync those songs to the PC. The pieces seem to be there already. You can pre-credit an iTunes account for purchasing (which presumably one would need to do to purchase over the phone). I can see this easily extending the marketshare of iTunes Music Store because I have often heard a song when I was on the road and would have given more than a dollar to purchase it then and there, or even add it to my shopping cart in iTunes.

Sync and Integration: One may argue that if it syncs in the random format like the iPod shuffle it is less likely to eat into the rest of the iPod marketshare. We know it will have some sort of sync capability with iTunes, but it would be sweet, and way above expectations if it also offered the same integration with car stereos that the regular iPods offer. This also might eat into iPod marketshare and would depend on what cut of the phone's Apple Gets. If it syncs in the random format I would expect it to have 512M, and if it syncs in the normal format I expect a smooth gig. If it is less, Motorola is squeezing Apple out of usability.

Marketing: Apple may have a free ride when it comes to marketing of the device. Motorola will obviously be marketing the device, but will Apple? If Apple pushes their weight in the marketing as well It could really take off. Motorola has been steadily building their brand name when it comes to phones (v710, now Razor) but a cool brand like Apple could push it further. Also will this iTunes phone be available through normal Apple retail channels as well as normal Motorola channels? It would be nice to have both a CDMA and GSM version sitting in Apple stores right next to the iPods. That would be a huge bonus for apple.

Packaging: It seems so simple and obvious. Does it come with the ever-so-popular white headphones? That is the reall tell of weather it is cellphone with a music player tossed in, or if it is truely designed to serve both purposes. The Razor sold some millions of units (of 31.8 total) for the quarter. Apples stands to have a nice slice of that which will help their market penetration. An aditional million units is adding an nearly 25% market penetration to their existing iPod lines.

So as you see.. these things should give an accurate depiction of the strength of the relationship between the two companies. Heres to hoping for apple to make a perfect score on this one... But could you pick a better name than 'ROKR', something we can say as a word?

(I'll save the phone camaera syncing with iPhoto for another post.. it would be a godsend but Verizon might not like it.)

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