Personal Tech Pipeline | Report: Major Carriers Snub Moto's iTunes Phone
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April 21, 2005

Report: Major Carriers Snub Moto's iTunes Phone



Courtesy of Mobile Pipeline

At least two major U.S. wireless carriers -- Verizon Wireless and Sprint -- will snub the forthcoming iTunes cell phone being developed by Motorola and Apple, BusinessWeek reported Thursday.

The reason is that wireless carriers are planning to launch their own music services in which users would download music over-the-air, which would increase usage -- and profits from -- the carriers' wireless data services, BusinessWeek said. The carriers would make money both from the transmission of the songs to users and from sales of the songs themselves.

By contrast, the iTunes phone would enable users to acquire songs on their desktop computers and transfer them to the phones.

"It's hard for people in any industry to support something that cuts them out of potential future revenue streams," BusinessWeek quoted Graeme Ferguson, Vodafone's director for global content development, as saying.

In addition, BusinessWeek said that Cingular, Sprint and Verizon will charge two or three times as much -- about $2 per to $3 per downloaded tune -- as iTunes charges.

Without support from the wireless operators, any new devices that uses a cellular network is doomed. That's because the wireless operators determine which devices can access their networks. That isn't stopping Motorola and Apple, however. A report posted earlier this week in Financial Times quoted Motorola CEO Ed Zander as saying the companies still expect to release the iTunes phone.

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