Apple iPhone could take a bite out of Motorola profits

Posted:
in iPod + iTunes + AppleTV edited January 2014
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.
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Comments

  • Reply 1 of 55
    backtomacbacktomac Posts: 4,579member
    Bring it on. Can't wait to see what they can do with a phone. Hopefully it will be a little bit more than just an iTunes phone.
  • Reply 2 of 55
    louzerlouzer Posts: 1,054member
    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.



    Hell, just look at Motorola. They could only get Cingular to carry their iTunes music phones...
  • Reply 3 of 55
    hmurchisonhmurchison Posts: 12,341member
    Yeah I'm not too interested in dealing with the Wireless Gestapo. I hope someday VOIP over Wireless WAN eats into their sales something fierce.
  • Reply 4 of 55
    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.
  • Reply 5 of 55
    I think whatever they release, it will integrate seamlessly with the Mac OS, offering a cell phone experience akin to the iPod experience which has proven to be such a big success. That's the best way for Apple to improve upon cell phones already out there. Make it work well with a computer OS, something that motorola and company simply don't have the ability to do.
  • Reply 6 of 55
    johnnykrzjohnnykrz Posts: 152member
    If it works by Apple logic, it will be a great product with an excellent, simple interface.



    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!
  • Reply 7 of 55
    irelandireland Posts: 17,751member
    I'll buy one
  • Reply 8 of 55
    backtomacbacktomac Posts: 4,579member
    Quote:

    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.
  • Reply 9 of 55
    aegisdesignaegisdesign Posts: 2,914member
    Quote:

    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.



    Quote:

    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.
  • Reply 10 of 55
    aegisdesignaegisdesign Posts: 2,914member
    Quote:

    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.
  • Reply 11 of 55
    davegeedavegee Posts: 2,765member
    Quote:

    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
  • Reply 12 of 55
    apple doesnt do new markets, or full markets they say so themselves, however they do go into evolving markets which is where i think they should enter the cell phone market.



    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!
  • Reply 13 of 55
    Apple branded MVNO (virtual carrier aka virgin mobile) +

    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.
  • Reply 14 of 55
    porchlandporchland Posts: 478member
    I don't see Apple bringing out a phone just to compete in the handset market. Apple is either (1) taking a big gamble that mobile phones will eventually eat up a big piece of the MP3 player market and getting in while phones and MP3 players are still largely separate markets, (2) Apple is about to buy a wireless carrier, or (3) Apple is about to set up its own virtual wireless company.



    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.
  • Reply 15 of 55
    I applaud any opportunity Apple gets to kick Motorola in the balls.



    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!
  • Reply 16 of 55
    Someone touched on it already. Apple could make the phone link effortlessly/automatically via bluetooth with address book, but they wouldn't want to stop there, they could do the same with Mail and iCal. That would be a great way to sell these phones to Mac users, just like Apple did when the iPod first came out.



    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.
  • Reply 17 of 55
    tenobelltenobell Posts: 7,014member
    Quote:

    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.
  • Reply 19 of 55
    addaboxaddabox Posts: 12,664member
    The trouble with being an MVNO is that if you're actually successful, the carrier whose business you're cutting into takes your coverage away.



    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.
  • Reply 20 of 55
    xoolxool Posts: 2,460member
    I'd much rather give my cell dollars to Apple than Cingular, Moto, and the like. The iPod interface is simple, speedy, and extensible, and I far prefer it to the clunky, slow interface on my Motorola phone. There's a few things Apple would need to work out but I'm confident they'd do a good job, and versions 2, 3, and 4 will only be better.



    I don't see replacing my phone for another year or so, but by then hopefully Apple kit will be out.
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