An Apple-branded phone is not only a smart decision for the company, industry analysts say, but it’s also a necessary move to push another Apple handheld device, the iPod, into the future.
And though the first so-called iPhones would be a year away — if they even exist at all — analysts believe a device directly from Apple stands a much better chance at success than the iTunes-sporting Motorola phones that came before it.
“The field is open and Apple is the obvious contender to put a device in there,” said Roger Kay, president of the market-research firm Endpoint Technologies Associates. “Clearly, it won’t open its platform enough to let anybody else do a good enough job to satisfy the end customer. Apple can and should fill the bill itself.”
Rumors of an Apple-branded mobile phone are hardly new, circulating in some form or another for the better part of four years. Each year, speculation seems to grow that Apple has a mobile phone in the works — with the only thing coming out of Cupertino in that time is Apple’s continued silence on the subject.
The latest round of speculation was stoked last week when Wall Street Journal columnist Walt Mossberg
reported that Apple was working on “a media-playing cellphone and a home-media hub.” Furthermore, Tokyo newspaper Nihon Keizai Shimbun reported in its Saturday morning edition that the president of Softbank, Japan’s third-largest cellular carrier — met with Apple CEO Steve Jobs. Softbank recently entered into the wireless business when it acquired Vodafone’s Japanese unit.
Softbank issued a press release denying that it is working on a phone.
According to a Kyodo News Service report, the first phones from the partnership are expected next year; they’ll likely play downloaded songs. Like current iPod music players, these handsets will play music downloaded via a personal computer. However, a second range of handsets that can directly access the iTunes Music Store and download songs is also being planned, the report said.
If it comes to pass, the deal would be “a smart move for Apple because the phone market is so big,” Kay said. “With a billion phones a year shipping, even a small percentage of that market represents a huge number of platforms. Apple can’t sit by and watch others reap that market.”
Technology Business Research analyst Tim Deal believes the timing is right for an Apple phone and points to another recently introduced service as an example of what Apple must do in order to keep the iPod relevant.
“The emergence of Verizon’s V-Cast-enabled phones has demonstrated that the future of portable media requires on-demand content any time and any place,” Deal said. “In order for the iPod to maintain its strong competitive presence, it must transcend its current means of wired- connectivity.”
An Apple branded cell phone will not be the first device to enable users to play iTunes songs.
Motorola has released several phones that give users the ability to use iTunes on a mobile device, but EndPoint analyst Kay believes there will be a big difference.
“The Motorola phone was a shot in the right direction, but the agreement crippled the product to the point where it failed,” Kay said. “Apple restricted Motorola’s phone to the point where it lacked utility. When Apple does it for itself, it will make sure that the phone has sufficient capacity, is elegant enough to attract attention, and has the trademark Apple ease of use.”
Deal agrees with that assessment of the Motorola iTunes phones. “Apple had little to no control over the design of Motorola’s iPod-enabled phones, and Apple provided only limited marketing support to their launch,” Deal said. “An Apple-branded phone would feature Apple’s innovation of design, as well as be supported by the company’s robust marketing machine.”
Having a mobile device in countries like Japan could help Apple’s sales immensely. While Apple’s iPod music players and its iTunes Music Store dominate the legal music download market in most countries, it’s only a minor player along in Japan, as are competing PC-based services. In 2005, about 96 percent of the 268 million tracks purchased electronically were downloaded via mobile services, according to the Recording Industry Association of Japan.
Apple representatives were not immediately available to comment for this story.
Martyn Williams contributed to this report.