ROK on
Motorola has launced its much trailed iTunes phone, the ROKR (geddit?) which has enough memory for users to transfer 100 songs from their Mac or PC onto the phone.
The phone is available in the USA from today, exclusively through Cingular and will be hitting European markets as follows:
U.K. — available first with Carphone Warehouse, expected in mid-September and then with O2, followed by Orange, Virgin Mobile, BT Mobile and other top retailers through September and October
France — expected to be available by late September through “key retailers”
Italy — expected to be available by late September through “key retailers”
Germany — expected to be available through “distributor and operator channels in 2H 05”
“The Motorola ROKR represents the ultimate convergence of mobile communications and music,” said Ed Zander, chairman and CEO of Motorola. “Fusing iTunes with your always-with-you mobile phone, we’re revolutionizing the way the world experiences mobile self-expression and entertainment.”
“We’ve worked closely with Motorola to deliver the world’s best music experience on a mobile phone,” said Eddy Cue, vice president of iTunes. “We’re also thrilled to be working with some of the largest wireless carriers in the world to bring this pioneering phone to market.”
The Motorola ROKR features a color display for viewing album art, dual built-in stereo speakers and stereo headphones that also serve as a mobile headset with microphone. Music fans can randomly autofill or manually fill the mobile phone with playlists of their favorite music, audiobooks and Podcasts from their iTunes library via a USB connection. The Motorola ROKR pauses music automatically when users take a call and offers the ability to listen to music while checking messages or snapping a photo.
Based on four minutes per song and 128Kbps AAC encoding, Motorola reckons there is roughly enough storage capacity for 100 songs.
Industry reaction – the consultant
Jerome Buvat, strategic business consultant at Capgemini Telecom, Media & Entertainment, has outlined below his views on the announcement:
APPLE’S MOTIVATION
There are two key reasons why Apple is launching this product today. First, there is a strong demand for mobile music. Mobile users want to hear music on their mobiles as shown by the success of full-track music download services launched by mobile operators: in Japan, KDDI reported five million full-track music downloads in five months after the launch
of the service; Vodafone reported one million full-track music downloads in four months following a promotion offer of three free music downloads per month.
Second, launching this phone will enable Apple to target a much larger market-by the end of the year, there should be around 40-50 million music-enabled mobile phones in Western Europe, whilst Apple has sold around 20m iPods since its launch. By launching this phone, Apple expects to increase its download music revenues as users of the ROKR can only buy songs from iTunes.
COMPETITION IN THE MOBILE MUSIC MARKET
Apple will have to compete against many other players trying to capture a share of the mobile music market:
* Mobile operators that offer their own download service but which will struggle to compete given the very high transfer charges, up to a 100% premium
* Music labels, such as Warner Music, which is developing a solution allowing users to download full tracks from Warner’s music catalogue to their mobiles
* Internet-based music sites, such as Napster, which launched its digital music subscription for mobile users – ‘Napster on the go’
* Fixed broadband operators, which are increasingly launching music download services
CHANCES OF SUCCESS
The success of this handset will depend on its retail price and
therefore on subsidies that operators will be willing to pay. It is
unclear whether operators will want to subsidise the phone. On one hand, if they offer this handset at an attractive price, they will contribute to the cannibalisation of their own music revenues. But on the other hand, if there is a very strong demand for the handset, operators will be forced to offer it at a low price to gain market share. The choice of the handset is still the most important factor for consumers when choosing a mobile operator.
THE PREMIUM ON DOWNLOADING DIRECTLY TO MOBILE
This move from Apple and Motorola is unlikely to significantly hit mobile operators as the mobile music market for operators will be relatively small in value with less than 0.01% of mobile revenues expected in the next 2 to 3 years. Indeed, consumers are more likely to download songs from the internet and then transfer them to their mobile phones rather than use the mobile networks, given the very high bandwidth charges. Downloading a song from iTunes costs around 1 euro
vs. 5-7 euros from mobile operators’ portals if you incorporate the cost of the data transfer.
APPLE – NOT THE FIRST
This phone is not the first phone to have music capabilities and a harddrive. Samsung in Korea launched the V5400 that has a 1.5GB hard drive. It is due to launch the i300 that has a 3-GB hard drive and will be able to play 1,000 songs.
Industry reaction – the competition
Microsoft offer Mobile Europe the following comment on the iTunes/ Motorola announcement:
“When it comes to music on phones, Microsoft believes that consumers want choice – and we’ve delivered.
o There are more than 70 Windows Mobile-based phones that play music on the market today, from 41 device manufacturers, available through 68 mobile operators in 48 countries.
o Since they were first available in 2002, all Windows Mobile-based phones can play back music; and today, people can purchase and download music to their phones from more than a dozen online services including MSN Music, Napster and Yahoo!.
Choice isn’t only important for consumers; operators want to deliver value-added services without getting locked in to one company’s business model or proprietary platform.
o In Europe, T-Mobile, Orange, Vodafone, and 02 all offer Windows Mobile phones and their own branded music services compatible with these devices.
o Last year T-Mobile Germany launched the SDA Music Phone, designed to work with T-Mobile’s Jukebox service, which offers music downloads to be transferred to Windows Mobile phones either through the PC or over-the-air.
In all, Microsoft is committed to forming and building partnerships that bridge the mobile and music world across the various software investments we are making in Windows Mobile, Windows Media and MSN Music.”