the itunes phone , OpenGardens and a tale of two headlines ..

rokr itunes.JPG

Hello all ..

As the apple / motorola itunes phone becomes a reality, it’s interesting to compare two headlines

Sep 7 2005 : Apple motorola and cingular unveil the itunes phone

BUT

April 21 2005 US mobile carriers shun itunes

So, what happened between these two headlines?

Why the change in heart?

I have long believed that the biggest threat to the existing vested interests in the mobile data industry is from outside the industry. Apple is one example of a new, disruptive entrant.

The ‘service’ of listening to music on the go can be fulfilled through more than one means(and consequently through more than one vendor). And herein lies the threat, predictable responses, break in the ranks(in this case Cingular) and consequent u-turn.

Lets start with the April story first(US carriers shun itunes)

A synopsis of the story (as applicable to us) is as follows:

All vendors are fighting over the same set of customers. Thus, the battle shifts to marketing(branding). Who is the stronger brand?

The carriers believe that they are stronger. The numbers speak for themselves at fiscal reporting per quarter: (Cingular – $8.2bn, Verizon $15bn in Q4 2004 but apple a measly $3.2bn).

So, is apple punching above its weight in terms of its brand?

That’s the real question and the real threat!

But let’s ask the people who really matter – the customers!

Apple is FAR bigger in customer mindshare than either verizon or cingular.

So, the balance of power shifts!

It shifts in Apple’s favour ..

Thus, the carriers are forced to come to the party(and its in everyone’s interest to do so)

So, predictable arguments have to be put aside.

These include .. as per the article .. “Operators want customers to download songs over the air, directly to handsets. But with the iPod phone, customers would download songs to a PC and then copy them to the phone,”

In other words .. a walled garden!!

But how feasible is it really? Even today you can resync to PCs, use memory cards etc. In other words, over the air download is not the only path! ..

Which brings us to the second headline i.e. Apple motorola and cingular unveil the itunes phone. Clearly, its in Motorola’s interest to partner with Apple .. but note that one operator(Cingular) has broken the ranks. Note also that it was the smaller operator in terms of quarterly revenues

With better technology and richer devices(like Nokia N91 on the horizon) – the stage is set for interesting times

What’s your take on this story?

My take is – this could be a huge opportunity for the entire industry. I have always believed that the mobile device could well be a focal point for digital convergence.

Seek thoughts

Image source: carphone warehouse