Apple iPhone could take a bite out of Motorola profits
Apple Computer plans to introduce its own branded multimedia cellphone, which could put a dent in Motorola's profits, according to a Barron's Online story.
As the U.S. handset leader, Motorola may be vulnerable to any new handset trend, Ken Leon, a Standard & Poor's Equity analyst, wrote in a research note sent to clients on Monday. However, Leon said he believes Motorola is ready to ship in volume its own innovative products "soon."
"We think Motorola's PBL, SLVR and Q products, along with the RAZR, will boost 2nd half [2006] sales," the analyst told investors.
Leon sees a new, more robust Motorola SLVR handset that can hold more than 500 songs as being the company's answer to any such Apple iPhone.
Recently, several Wall Street analysts have made comments that suggest an Apple-branded cell phone may soon become a reality.
In one report, released last week, analysts for PiperJaffray said they believe there is a "75 percent chance" that Apple will debut an iPhone product within the next 12 months.
According to the report in Barron's, which is causing much of today's iPhone hoopla, Apple is said to be in talks with Tiawanese-based Hon Hai over a contract that would allow it to help produce the phone.
Also known by its US trade name, Foxconn, Hon Hai is one of Apple's largest manufacturing partners, whose resume includes production services on the PowerMac G5, Mac mini, iPod and AirPort Express, among other products.
The Apple-branded phone would make a debut in the fourth quarter of the year, according to the report.
As the U.S. handset leader, Motorola may be vulnerable to any new handset trend, Ken Leon, a Standard & Poor's Equity analyst, wrote in a research note sent to clients on Monday. However, Leon said he believes Motorola is ready to ship in volume its own innovative products "soon."
"We think Motorola's PBL, SLVR and Q products, along with the RAZR, will boost 2nd half [2006] sales," the analyst told investors.
Leon sees a new, more robust Motorola SLVR handset that can hold more than 500 songs as being the company's answer to any such Apple iPhone.
Recently, several Wall Street analysts have made comments that suggest an Apple-branded cell phone may soon become a reality.
In one report, released last week, analysts for PiperJaffray said they believe there is a "75 percent chance" that Apple will debut an iPhone product within the next 12 months.
According to the report in Barron's, which is causing much of today's iPhone hoopla, Apple is said to be in talks with Tiawanese-based Hon Hai over a contract that would allow it to help produce the phone.
Also known by its US trade name, Foxconn, Hon Hai is one of Apple's largest manufacturing partners, whose resume includes production services on the PowerMac G5, Mac mini, iPod and AirPort Express, among other products.
The Apple-branded phone would make a debut in the fourth quarter of the year, according to the report.
Comments
And carriers won't subsidize your phone if you don't let them disable a boatload of features that they can then turn around and charge for, like downloading music, dumping stuff to/from the computer, etc.
Hell, just look at Motorola. They could only get Cingular to carry their iTunes music phones...
Cell phone that used cell service when out and about but also, at home connects to land-line by acting as a cordless phone to a base station so you could pick up land-line calls (perhaps using wi-fi for greater range?).
Complete Addressbook integration with all labels, all phone #s preserved, ability to use groups (unlike on iPod today) to browse. Automatic group by company names so can look up by company as well person. unlimited number of names and addresses (except as memory limited). Easily get other numbers of person recently called or who called you, not just the one used.
Comfortable headset with good mic that could switch between music and calls easily. Or switch to car speakers.
Ability to sync Filemaker databases to phone/iPod.
Hopefully, it will also be dynamic and function more like a PDA with touchscreen (already speculated to be on new iPods), iSight, Java or other environment, etc. Basically Mac OS X Mobile. Safari and Mail mobile included with full syncing. They could incorporate the service into .Mac. For example, you could access a file on your iDisk and view it or sync to the computer without requiring you to ever connect the device to your computer. I realize that this isn't exactly an original idea, but you know Apple will do it better and they'll have my order.
willNeuhauser: We could then have FileMaker Mobile on our Mac Mobile with unilmited range server access!
Originally posted by willNeuhauser
Cell phones have all the earmarks of something Apple could do much better than others ... if they tackled some of the outstanding issues.
Cell phone that used cell service when out and about but also, at home connects to land-line by acting as a cordless phone to a base station so you could pick up land-line calls (perhaps using wi-fi for greater range?).
Complete Addressbook integration with all labels, all phone #s preserved, ability to use groups (unlike on iPod today) to browse. Automatic group by company names so can look up by company as well person. unlimited number of names and addresses (except as memory limited). Easily get other numbers of person recently called or who called you, not just the one used.
Comfortable headset with good mic that could switch between music and calls easily. Or switch to car speakers.
Ability to sync Filemaker databases to phone/iPod.
Agree. A me to product won't fly.
Originally posted by Louzer
The phone will die a long and painful death. The large Cell Phone market is there only for those who want ot play nicely with the service providers. Most people aren't going to spend $$$ on a new cell phone, when they can get one free or for a measly $ from their carrier.
And carriers won't subsidize your phone if you don't let them disable a boatload of features that they can then turn around and charge for, like downloading music, dumping stuff to/from the computer, etc.
Ah, America.
Perhaps, for once, Apple will realise Europe offers them a better and more technically advanced market and release there first.
Originally posted by Louzer
Hell, just look at Motorola. They could only get Cingular to carry their iTunes music phones...
Perhaps the others didn't want to be associated with such a shit phone.
Originally posted by willNeuhauser
Cell phones have all the earmarks of something Apple could do much better than others ... if they tackled some of the outstanding issues.
Cell phone that used cell service when out and about but also, at home connects to land-line by acting as a cordless phone to a base station so you could pick up land-line calls (perhaps using wi-fi for greater range?).
Complete Addressbook integration with all labels, all phone #s preserved, ability to use groups (unlike on iPod today) to browse. Automatic group by company names so can look up by company as well person. unlimited number of names and addresses (except as memory limited). Easily get other numbers of person recently called or who called you, not just the one used.
Comfortable headset with good mic that could switch between music and calls easily. Or switch to car speakers.
Ability to sync Filemaker databases to phone/iPod.
Apart from groups in iSync (and that's an Apple issue) and Filemaker export (again Apple), Symbian phones from Nokia and Sony Ericsson do all the above.
Originally posted by AppleInsider
Apple Computer plans to introduce its own branded multimedia cellphone, which could put a dent in Motorola's profits, according to a Barron's Online story.
I've been waiting SO long for Apple to introduce it's iPhone.... In fact I've held off buying a phone ever since I saw that Apple registered the iphone.org domain name back in 1999. So come on Apple release the iPhone already, I've got a TON of calls I gotta make and I ain't getting any younger!!!
Dave
The iPod didnt create a new market, apple entered the market of personal music players when it was transitioning to mp3.
I think that apple should make an iPod which has the added feture of being able to communcate with other ipod for free with voip over wifi when you are in range (and if they were feeling really nice they could put an iSight in there for video aswell, but that may not be possible at this time). This approcah would definately make them a major player as this communication technology advances, as all the people who have ipods can call all their friends who have ipods.
A third party could make some kind of accessory that allowed you to use the phone as a normal cell, but i dont think apple should do this. Meanwhile as wifi coverage and voip grows people will have a device with this feature they can use more and more for free. From my point of view (as a student) it will be awesome as i could call my friends who have wifi for free at home, in college, i could call my family for free. It would be awesome.
stu
edit: this would also prevent problems with the carriers as apple just wouldnt be dealing with them.
The only problem i can really see yould be the current lack of coverage for wifi, but for when you are at home and college this would be a great solution imo!
DRM system (fairplay) +
BRAND (millions of loyal users both mac and ipod) +
CONTENT (hollywood, video, music, etc) +
BILLING SYSTEM (already have subscriber billing info from iTunes) +
PHONE (handset, perhaps OEM from Samsung--apple designed with
patent design) +
SERVICES (.mac, etc) =
HUGE SUCCESS
If you think iPod market is big, the mobile smart phone is ENORMOUS.
This would be HUGE. Let's also not forget Disney which is also creat MVNO and Jobs is board member.
http://www.tangentmobile.com has an article on this.
No. 1 seems to safe for a company that basically re-created the MP3 market from the much smaller market that was already there.
No. 2 would take enormous balls and a lot of money. Cingular, Sprint Nextel, Verizon Wireless and T-Mobile are all enormous companies with lots of entanglements. Apple could acquire a small or regional carrier like SunCom and grow from there.
No. 3 is the Virgin Mobile model, and that seems the most likely reason for Apple get into the mobile marketplace. It's a much more cost effective entree than trying to swallow a huge carrier, and it gives Apple control of every customer from the first day.
Had Motorola put a concerted effort into PowerPC chips around the time OS X debuted, the Mac could have garnered a lot of marketshare with machines that ran on a secure system during Microsoft's inability and unwillingness to deal with the insecurity of its own OS. But, nooooooooo, those jerks at Moto let the G4 chip fester at a measly 1.42 GHz for ages while Intel and AMD rocketed ahead.
All current cell phones have pathetic UI's. You need to carry around the manual to execute all but the most basic functions. Most users are afraid to use many of the cool features of their phones because they are such a hassle. If Apple applied its UI experience to cell phones, they could replicate the iPod phenomenon.
And if Apple pulls that off, IBM ought to consider investing in a cup; their scrotum looks a lot like a soccer ball to Mac fans. Low-power G5 chip "someday" -- ptui!
Apple could do the same thing they did to expand the iPod market to the pc world. Port iTunes, or in this case Address Book & Mail & iCal to the pc.
This would give pc users who are curious, another example of apples software and hardware integration. It could have a halo effect like the iPod, and be another way to bring more pc users over to the mac.
I'm not arguing that they will do this, or should, so don't complain to me. I'm just speculating about what they might do.
Most people aren't going to spend $$$ on a new cell phone, when they can get one free or for a measly $ from their carrier.
I agree its difficult to see Apple being successful in the current cell phone market. Apple will have to do something radically different.
The only way I can also see this working is by Apple selling the hardware with access to free or extremely low cost service.
--B
If Apple is content with being a "boutique" cell service provider, ala Virgin, I suppose they could do some small scale roll out.
But they cannot, and can never possibly, compete with the vast infrastructure deployment of the big telcom operators; nor can they, as Louzer so expertly summed up, expect to make some kind of killer handset and get it offered by the big operators. The big operators are absolutely obsessed with squeezing every dime out of a closed system of ring tones, wallpapers, music, video and data services. They will simply never offer an Apple handset that moves that functionality to Apple, which is the whole point of an Apple handset in the first place. Never. Never. Never.
So that leaves their options somewhat limited. A cell style VoIP handset is certainly something different, but I'm don't see how, with the ubiquity of cell phones, there is any value added there, unless they can price it significantly lower, and even then, unless you can get WiFi everywhere you can get cell reception, it would count as an additional monthly charge to duplicate what your cell already does, which is a tough sell, to say the least.
Their only hope of "cutting into Motorola's sales" (which I think is patently ridiculous, given the reasons above) is to get one of the smaller service providers to pretty much hand over the download and data services part of the offering to Apple, in the hopes that being the "official iTunes/Apple cell phone company" will make a smaller carrier less small.
I don't see replacing my phone for another year or so, but by then hopefully Apple kit will be out.