March 26, 2005
Major Hangups Over the iPod
In January, it leaked word that the iPod/Motorola mobile phone would debut at a conference in mid-March. But at the New Orleans confab, Edward Zander, Motorola's chief executive, announced that the handset's debut would have to wait, reports BusinessWeek.
Industry sources say a lack of support from such giant cellular operators as Verizon and Cingular was instrumental in delaying the unveiling.
Behind the clash are two different views of the future of music on mobile phones. Apple and Motorola phone could be loaded with songs simply by dropping it into a cradle attached to a PC, so that music wouldn't have to travel over carriers' airwaves.
But wireless operators want customers to pay to put music on phones. They think getting a full song should be like getting a ring tone.
One insider says that even if Cingular and Verizon won't sell the Motorola-Apple phone, smaller rivals may peddle it to gain ground on the industry leaders. Motorola is working out ways for carriers to profit from digital music, and it expects to launch the phone with that support this summer. Motorola and Apple could also bypass carriers and sell the phone via retail stores or their own Web sites.
But that would mean no carrier subsidy on the handsets. So customers would have to foot the music phone's entire bill, expected to be around $500. "Who wants the $500 iPod phone when you could buy a phone and an iPod for that much?" says analyst Tole Hart of researcher Gartner.
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