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Analyst: 'Trouble Brewing for iTunes' From Verizon's V Cast

Research firm Strategy Analytics on Tuesday issued a new report in which it saw "trouble brewing for iTunes" in the form of Verizon's new Wireless V Cast Music Service. The company estimated that global shipments of music-capable cell phones will skyrocket to one billion by the year 2010 while portable music players will see a modest increase to around 100 million.

"As a strategy to bring it into mobile, Apple's partnership with Motorola has failed," senior analyst Martin Olausson said in a statement. "Its lack of a subscription payment model, as well as the fact that it is currently limited to iPod music players, will increasingly put Apple at a disadvantage to services such as V Cast Music.

"The speed with which sales of music player enabled mobile phones will overtake dedicated music players will accelerate this trend."

Philip Taylor, Director of Strategy Analytics' Wireless Internet Applications service, added: "We believe that Apple's experience with Motorola rules out any quick launch of an iPod with built in cellular radio, and that Apple will continue to build resources towards bringing a wireless enabled product to market in 24 to 36 months.

"As a result," he continued, "Microsoft will gain strength as the most viable immediate alternative for manufacturers and service providers seeking to gain share for themselves."

Strategy Analytics also projected that by 2010, US$8.2 billion worth of music will be delivered digitally on an annual basis, accounting for almost 30% of the total music sales in Western Europe and North America.

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A guest said: (hide)

They've been sayting the same thing for the last three years. Mark my words it won't happen. People don't want to pay $10 a month to listen to their music. The iPod is safe!

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fartheststar said:

member since 04 Jan 2004 with 222 posts, unranked, send him a message or view his profile

yawn.... next.

Apple will do the right thing.

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Dirt Road said:

member since 24 Oct 2002 with 1239 posts, unranked, send him a message or view his profile

A billion smellphones there may be, but how many will be subscribed to Verizon? 50 million tops? And I doubt most of them will be music-capable.

Napster's dwindling popularity tells us that most people aren't interested in a subscription model, long-term. And Verizon wants $15/month for V Cast while Napster is losing customers at $10/month?

Jeeeeeeeeeeeeeeeez.

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Tiger said:

member since 17 Jun 2003 with 1018 posts, unranked, send him a message or view his profile

Don't any of these analysts READ before they comment? A new iTunes phone appeared today. Napster's on the selling block and Google's interested because somebody's told them that music may go to a subscription model (not for this music junkie, I don't even want it on a phone!).

It's like they live in a vacuum or something.

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A guest said: (hide)

With iTunes having set the bar at 99 cents/song I wonder how successful these services are going to be when you charge $3 or $4 a song?

That said, Apple needs to jump into this market.

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A guest said: (hide)

VCast music is FAR from all that.

It doesn't play nice with mp3s (auto-converts them to WMA for an audio quality hit- you really don't want to run your audio files through lossy codec converstions TWICE, now do ya?), their music selection is about one-quarter of iTunes presently (half million tracks vs two million tracks for iTMS), and their over-the-air downloads are 64 kbps... relatively low quality.

Plus, all downloads are WMA, which doesn't work on iPods, not without conversion. Inconvenient, and a quality hit. Yay.

VCast Music isn't a major threat in its present form, sorry.

The more legitimate fear is that you "can't beat something with nothing", i.e. Apple should make the iTMS available for over-the-air downloading to all sorts of cell phones on all sorts of carriers. This I would like to see too.

.

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked, send him a message or view his profile

Let's see, if there was even the slightest indication that music enabled cell phones were starting to overtake the iPod, guess what Apple would do? They'd find a solution!

Apparently this analyst thinks he's smarter than Apple. Thanks for the insight. I'm sure these thoughts have never crossed the minds of anyone at Apple.

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A guest said: (hide)

PS- VCast Music also wants $1.99 for tracks downloaded over the air... ouch. Though not quite as bad as Sprint's ridiculous $2.50 charge.

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A guest said: (hide)

Sounds like FUD to me . While their may be 1.5 billion cell phone consumers out there, I can't accept thatl 2/3 of them will buy music on them or for them. Unless it will be as ubiquitous as a camera phone - and that still does not ensure 1 billion consumers!

But never say never - maybe Verizon will take over the world with their popular CDMA network

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A guest said: (hide)

I believe that I speak for many people in saying that I just want my phone to work. My battery barely lasts as it is! I'm not draining it more by using my phone as a music player too.

As for subscription services, I'm guessing new problems such as cell phone switching will make this short-lived. If I go from Verizon to Cingular, I lose my songs too??? That's why people want to own their music.

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MOSiX Man said:

member since 20 Jun 2001 with 558 posts, unranked, send him a message or view his profile

Strategic Anal... who?! Gee, I wonder if the reason I have never heard of these guys is that their 'insight' seems more like a feeble attempt to sound like they might know something about a popular topic. Sure! Eventually, a billion people will have a phone with the option of joining a service through which they can very slowly download Microsoft DRM-ridden, poor quality music, over a wireless medium that has been proven not to be reliable, with monthly rental fees and/or exorbitant per unit costs. Um, yah. That is a good bet! Or... NOT!

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A guest said: (hide)

I would much rather have a cell phone enabled iPod than a music enabled cell phone.

For the most part cell phone interface designers are stuck with a clumsy design.

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Quote:
would much rather have a cell phone enabled iPod than a music enabled cell phone. For the most part cell phone interface designers are stuck with a clumsy design.

True, but consider trying to make a phone call with a clickwheel. It would take nigh unto forever. The iPod interface is very well-designed for choosing something from a one-dimensional list. It is reasonably well-designed for going through heirarchial menus, as long as you don't need to see where you've been or where you're going. (IOW, you can see only one layer at a time, not the parent nor the daughters. The iTunes interface lets you see two layers--and, until the nested folders inside playlists thing, that's all there were.) Entering data with a clickwheel, though, would be hell on earth.

Cel phones and PDAs have very different interface needs from music players, as you must be able to enter data. Cel phones have to be able to enter numbers quickly and surely. The keypad of a touchtone phone was taken from the layout of a 10-key mechanical adding machine, which was developed to be able to enter numbers quickly with one hand without looking at the keyboard. (Such adding machines predated touchtone phones and computer keyboards by decades.) PDAs need to be able to easily input text, more than just numbers, so those with keyboards use a QWERTY thumb keyboard. However, those are terrible for inputing numbers with one hand. They are inherently two-handed and most put the numbers on the top row of letter keys, so you have to push another button first to input numbers. The Treo 600 and 650 compromise by using the middle of the keyboard as phone number keys when the device is in phone mode. Even so, it's still quite easy to hit the wrong key.

Human-machine interface design depends upon what the machine has to do and what the person has to control. Early automobiles used a tiller for steering, like the rudder on a sailboat, but that didn't work well. If it was designed for short-radius turns, it would be so sensitive at moderate speeds that the slightest twitch would turn the vehicle over, as the tiller could only move maybe 45 degrees in each direction. By using a wheel with gears, the driver could make small adjustments at speed and, by turning the wheel through a large angle, still make the short-radius turns required for parking, etc. An interface that works well for one situation may be terrible for another. (Just consider digital clocks vs round dial clocks. If you want to know precisely what time it is, the digital clock is better. However, if you want to know how long something has been going on, how much of an hour is left, or to tell time at a glance, the round dial is better.)

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A guest said: (hide)

"True, but consider trying to make a phone call with a clickwheel. It would take nigh unto forever."

Can't you have both? Or a keypad with some other sort of music interface than a click wheel? Or click wheel with some sort of other phone dialing system, Or something totally new that combines the two? Think outside of the cell.

Wouldn't be nice to have your OSX Address Book sync contacts with your cell phone enabled iPod. Then you could click wheel to whom you want to call. Sure you can put your contacts on the iPod now, but putting your contacts on a cell phone can be brutal. Putting and synching contacts with a TREO isn't too bad, but it sucks with a cell phone

Like I said I want a cell phone enabled iPod, not a music enabled PDA. I don't want or need a PDA. I don't need to carry a program that computes phases of the moon or displays Excel spreadsheets, your milage may vary, but I am not interested in your milage. I want a cell phone AND an iPod.

Think outside of the cell.

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A guest said: (hide)

Until battery technology improves, don't look for very efficient combinations of these two items. Like a poster above said, my cell battery barely lasts - it would die a fast, ignonomous death if I had music on it, too! And, my iPod almost doesn't have enough battery power, either - add my talking time to that, and neither instument is good for all day!

Face, it people don't want subscription music. Add that to a cell phone, and like another poster said, if I move from Verizon to Sprint - there goes my music! People aren't stupid, they can think these things through. Apple is giving people what they want - a music player that holds all the music they can listen to, wherever they want. Since they own it, they don't have to pay for it month to month, either. They can move it from PC to PC with no penalty, or transmit it to their home theater system either by wire, or wirelessly.

My cell phone does great at what it does. My iPod does great at what IT does. When I don't need my iPod, I leave it at home. Easier that way. Apple knows what it's doing, these analysts will only learn that the hard way.

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A guest said: (hide)

People are KIDDING themselves if they think that music on cellphones is a bad idea.

Literally five minutes ago, a guy was walking around my workplace showing off his new LG 9800. "Look, I got 108 mp3s on this thing, put 'em on my 512MB card" was one of his quotes. Seemed like a pretty happy camper.

Its really not inconvenient at all.

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A guest said: (hide)

I can't believe they included a link on the author's site for emailing him comments. I'm guessing that's they last time they provide any opportunity to provide them with "strategic" feedback. . . .

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