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News
Should Apple Build its Own iTunes Cell Phone?
Thursday, September 8th, 2005 at 3:00 PM - by Brad Cook
Even as Apple introduced the iTunes-equipped ROKR cell phone from Motorola on Wednesday, pundits continued to wonder whether the company would continue licensing the popular music software to cell phone makers or make the foray into the handset design and manufacturing business.
John Shinal, writing for MarketWatch, quotes Piper Jaffray analyst Gene Munster as saying: "If Apple pursues more relationships like the Motorola one, it will have missed an opportunity." While Apple will get a lot of exposure, Munster said that "from a revenue standpoint, the phone is a non-event for Apple."
On the other hand, NPD's Neil Strother told Mr. Shinal that "Apple would be crazy to try and build its own handset. It's a brutal, global business." With hundreds of millions of cell phones sold annually, Apple selling its own "would be a fairly large departure for the company, not to mention a huge distraction," Mr. Shinal writes.
With Microsoft desperate to get into the MP3 business in some way, whether through portable music players or through cell phones, Mr. Shinal says Apple should look at its own history to decide what to do. With Microsoft dominating the computer business by licensing Windows to manufacturers and Apple holding on to less than 5% of that market, "does Apple really want to become a phone maker in competition with Nokia and others?" Mr. Shinal asks.
"Much more likely," he writes, "Jobs has learned from history and has decided to play with the handset giants, rather than against them."
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