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Motorola-iTunes deal: test market for music industry

updated 02:25 am EDT, Thu August 5, 2004

Mot-iTunes has no downside

The Motorola-iTunes deal announced last month has few--if any--downsides, allowing Apple to test a new market for its music downloads because battery life is likely to be barrier to (extensive) song playback on any cell phone, according to BusinessWeek: "It's clear that Jobs's decision to hook up with Motorola won't threaten the iPod's position in the near term. And the harmonious arrangement could well enhance Apple's position in the digital-music market and cement iTunes as the preferred digital jukebox for handheld devices. What's not to like?"




by MacNN Staff

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  1. PookJP

    Joined: Dec 1969

    0

    FP

    I find the concept of sales cannibalization funny.

  1. Naplander

    Joined: Dec 1969

    0

    erm...

    What's not to like is the fact that service providers are going to be cut out of the revenue share of music downloads, and are therefore going to stop subsidising the handsets as they currently do.

  1. koolkid1976

    Joined: Dec 1969

    0

    re: erm...

    "What's not to like is the fact that service providers are going to be cut out of the revenue share of music downloads, and are therefore going to stop subsidising the handsets as they currently do."

    You are quoting that from a news site aren't you? The revenue thaty make from proving phone service isn't going to go down whether the phone is used to take pictures, watch movies, or play music, in addition to talking on it. Needing extra revenue from the download service is like Toyota wanting a higher monthly payment for a car if it's also used as a taxi.

  1. Naplander

    Joined: Dec 1969

    0

    yep

    But yet another question is - what operator in its right mind will allow music on and off a phone that it controls, to a PC? So far, music offerings from carriers, such as MMO2ís dedicated music player, have been focused on keeping users within the walled garden. In the PC environment, the operator has no chance of making a margin on the music or on the download data communication time.

    http://www.theregister.co.uk/2004/07/30/motorola_apple_iphone/

  1. Kesey

    Joined: Dec 1969

    0

    re: erm...

    "What's not to like is the fact that service providers are going to be cut out of the revenue share of music downloads, and are therefore going to stop subsidising the handsets as they currently do."

    You are also forgetting that in the highly competitive cellular service provider market, cell co's are looking for a point of differentiation. If Cingular has the exclusive on iTunes, they may sell more phones and service than Tmobile. So, while they are not making as much in the downloaded ringtone market, they could be selling more service plans and increasing their customer base. Not to mention a data plan will prob. be need for this.

  1. testudo

    Joined: Dec 1969

    0

    Re: emm

    Also, keep in mind that if you use the phone to download the music, then the cell company gets the airwaves usage fee. They're only 'cut out' if you just transfer from the computer.

    Oh, and if the cell phone companies could get away with charging more for their phones, they would. They only give away cheap because of competition (gee, get that, competition keeping prices down) from others. They certainly aren't doing it to be nice to you all. As such, they aren't going to cut prices just because you can transfer music to some of the phones.

    Basically, when I read that original quote, it sounded like Comcast saying "If Apple doesn't give us a slice of ITMS downloads, we're going to raise our rates!" (not that their rates aren't already outrageous for the 'service' the provide).

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