Major Hangups Over the iPod Phone 432
chadwick writes "It seemed like a sure thing: the iPod mobile phone. What could be more irresistible than a device combining the digital-music prowess of Apple Computer (AAPL) with the wireless expertise of Motorola (MOT)? Motorola sent its buzz machinery into overdrive in January when it leaked word that the product would debut at a cellular-industry conference in New Orleans in mid-March. Well, hold the phone. At the New Orleans confab, a frustrated Edward Zander, Motorola's chief executive, stood before a roomful of analysts and reporters and said the handset's debut would have to wait. "
Pre announcements (Score:5, Interesting)
Showing precisely why pre-announcement of products only leads to problems, frustrations, and customer dissatisfaction.
Only announce products when they are done and ready to ship and you avoid this sort of garbage. Everybody is speculating on just what the hold-up is. It could be that the phone is not ready or that the wireless carriers are trying to extract every last cent out of somebody else's (Apple and Motorola) hard earned work. But the point is that there is now a consumer expectation and they are complaining to Apple and Motorola saying "why can't you get your $#!t together and release the product?" when it may actually be the fault of Verizon, Cingular et. al. The problem of course is that on sales of the songs themselves, Apple's profit is next to nothing. So having other companies try and muscle in on very thin margins means 1) either somebody has to take it in the shorts or 2) we all lose. Of course if the record labels would allow more access to the music for Internet delivery, it would be treated as the commodity it really is and there would be more room for profits from higher volume, but that is another post.
Oh, and it would be nice if people who are submitting articles would actually summarize the story rather than posting verbatim what the writer of the referenced article says.
Re:Pre announcements (Score:5, Interesting)
But then you forget how the market reacts. You pre-announce a product, or an idea, and when it makes sense and gets buzz, your stock goes up. But when you announce you need more time, nothing bad happens. (or at least you don't lose your previous gains) So, when you need capital to do such a thing, you pre-announce. Nobody gets hurt...you'll get your iPod phone soon enough, if of course, you can spend the dollars.
Same issues as usual, actually (Score:4, Interesting)
Handset makers want to stylize their phone as much as possible. Adding features and making their phone stand out from the rest of the pack. Operators want all the phones to support a certain set of basic functionality and fit into a certain form factor. They don't want to allow the handset maker's trademarks overshadow their own. On the other hand, the makers want it to be obvious to the user who the maker of that phone is.
Apple, and to a large extent Microsoft too, have very strong brands. They love branding. That's why we're talking about an iPhone and not an Apple-produced cell phone. But operators don't want that kind of power shifted into the hands of the makers.
So you get what we have here, which is the way he wants it.
uhhh (Score:5, Interesting)
The ipod is pretty tough yea, but it wouldn't last a week in the chassis of my mobile phone.
Nor would I want my phone to have a net worth of $400 either.
Can we get over this fixation with phone/mp3/toaster oven/breadmakers already? Their day has come and gone. I want devices grouped by how I use and abuse them.
Well then. (Score:2, Interesting)
Isn't Motorola supposed to be German anyway?
Why not add a cell phone service charge? (Score:4, Interesting)
So? (Score:3, Interesting)
Don't release it untill it's ready for sale. (Score:5, Interesting)
If you announce an iTunes / Motorola Cellphone before it is ready to hit the market, you adversely affect current sales of iPods and Moto phones. People like to have the next best thing, and they hate buying something that's outdated in a month. Consumers will usually hold off on purchasing a new device if they can get a cooler device in a few months / weeks.
This is precisely why Apple usually announces hardware and sells it the very same day. If they don't do that, they have to liquidate a load of outdated hardware. Consumers won't buy a 15 gig iPod if they know a 20 gig with more features will be on sale for the same price next month.
The only time Apple doesn't do this is when they have a future product that doesn't directly compete against what they are currently selling.
Apple has one of the best inventory records in the tech industry. Motorola should listen them.
Re:Pre announcements (Score:2, Interesting)
Ok, maybe it's not exactly the same, but wireless companies seem pretty greedy and I read an article somewhere that said they make a hefty chunk of change by passing telecom fees directly to the consumer. Even if my bill was the same amount that I pay now, I would feel more comfortable if they didn't itemize those fees and make it seem that the government requires them to directly bill the consumer.
Re:Motorola should have known this (Score:3, Interesting)
Think from a design/marketing point of view.
I know you've been thinking about Motorola's M3 razor or whatever that damn thing i don't need but severly want is.
Re:Motorola should have known this (Score:5, Interesting)
I cannot understand why Apple is sodding around with Motorola on this. They should have partnered with Nokia.
I couldn't agree more. My Nokia ended up breaking after about four years, and I ended up getting a Motorola. I've regretted every minute of it. Whereas Nokia seems to have a smiliar mindset to that of Apple (a focus on usability), my Motorola is the most unusable piece of crap I've ever had the displeasure of dealing with.
I can store something like five minutes of voice on the cell phone, but I'll be damned if it runs out of space with twenty text messages. You can't turn the volume off without making more noise. Even when the volume is off, some buttons still make noise (and are conveniently on the outside of the phone, so it can beep in your pocket) making the vibrate feature nearly useless. The "Accept" and "Cancel" buttons are on different sides at different times. The dial and hangup buttons are permanently juxtaposed. The "Memory Meter" shows you a representation of how much memory is left on the phone, but you have no way of telling whether or not a full bar means it's full of space or filled up. Assigning a one-touch dial number to contacts is a pain in the ass. The power connector features two microscopic hooks which are so easy to break it's unbelievable. The phone takes five minutes after "booting" before I can place a call, view my contact list, check messages, etc. Switching the phone to "Silent" or "Vibrate" does not necessarily turn the volume off.
I swear to god if I ever meet the man who designed this worthless piece of shit, I am going to bludgeon him with a tractor.
Re:We need to change this (Score:3, Interesting)
Of course - and this is the part you won't like - you'll have to pay full price for the phone. But that's fair - if Cingular doesn't like a particular phone then why should they pay more than half the price of it for you?
Darn - it would be convenient if this was a "big nasty corporation vs little guy" story. But it's just an "I don't want to pay for my own toys" story after all....
Re:uhhh (Score:5, Interesting)
And I don't to have to push a few buttons to get my pda/phone/camera into phone mode to make a call. Nor do I want some kiddie to hack into my pda/phone/camera and download everything about me.
I want a phone that calls people, it should be lightweight, very very tough (no 5 inch touch screen!) and not have a camera lens that I have to worry about. Nor do I want to recharge it every day. Integrated devices sacrifice in durability and longevity.
I want an ipod with many gigs of storage so that I can just grab it whatever mood I'm in, and find a suitable playlist. Integrated devices sacrifice in storage (at least right now)
I want a camera that takes good pictures and has a big honkin lens to capture lots of light for decent night time pictures. It should have a variety of features that allow me to tailor my pictures to different techniques (exposures, focus settings, etc). Integrated device sacrifice in picture quality.
You get what you pay for.
Just a thought (Score:2, Interesting)
Cell phones and mp3 players aren't exactly a match made in heaven. One is used to talk to people, the other is used to AVOID talking to people. :)
So ya, imho, stick to your iPod (or, if you're *really* cool, iRiver) for music, and whatever you prefer for a cell phone.
Re:Motorola should have known this (Score:3, Interesting)
Apple has had a partnership with Motorolla for over 20 years on the Macintosh. Right now it looks like they're going to be getting their chips from IBM for the foreseeable future, so they have to do something to stay good business partners with Motorolla in case Motorolla comes up with something good again (like they did with Altivec). Nokia is a competitor to Motorolla. It is a BAD idea to partner with your partner's competitor.
That's why.
Other manufacturers to the rescue... (Score:3, Interesting)
We've heard from all the major manufacturers where next-generation MP3 phones are concerned except Nokia, who just so happens to have a publicly announced contract with Loudeye. Loudeye, in turn, has signed a deal to provide a music store to O2. Read the press releases these companies have put out in the past few months and connect the dots here, people! The fact that the most powerful mobile phone manufacturer in the world isn't saying much probably means that it's coming to the party with sleeves full of aces!
Samsung is already on its second generation hard drive MP3 phone. The first was an unmitigated disaster and the second's not too bad! You can bet that the third will be a winner.
The world will move forward without Apple and Motorola.
Re:Pre announcements (Score:5, Interesting)
You were pretty harsh for someone who is so totally wrong. While the exact numbers are not available, it is believed that 60-65 cents is what goes to the record label. There are additional costs associated with the song publisher and the technology infrastructure that's required. So your claim of a 40% direct margin doesn't come close to including all direct costs, and completely ignores indirects.
It looks like you don't have any concept of margins at all, e-commerce or otherwise, the different types of margins that get calculated, or how margin differs from net profit. But hey, you did get to make a nasty crack about Apple iPod fanboys, right?
Apple claims the music store is a breakeven deal, and others estimate they make roughly 4 cents a song. That's a pretty trivial amount flowing through to Apple's bottom line. To put this into a "real world scenario" for you -- iTMS downloads are now estimated at well over 1,000,000 per day. [theregister.co.uk] Your ridiculously inaccurate numbers would mean that Apple is netting over $100 million a year from music downloads -- nearly double Apple's entire net profit in 2003 and more than 2/3 of their incredible 2004 results. [apple.com] I find that scenario, um, unlikely.
To make this a little simpler for you: Apple's goal is to make money and increase its stock price. They benefit from hugely successful and profitable products. Believe me, if the iTMS store was profitable, Apple would not keep it a secret and deceive us all with a fabricated story that they're just breaking even.
Re:Pre announcements (Score:2, Interesting)
See what you get when you state absolutes...
There's no way there's only $100-$150 margin on units like the Handspring Treo 650 or the Audiovox XV6600, and that's usually the best discount you can get on those.
On the *very high end*, there is plenty of margin left after the discounts. And the very high end is often what businesess are buying, which accounts for a decent percentage of sales.
Not only that, existing customers who are upgrading often cannot get even half the discount that new customers get, especially on high-end units.
So, while a lot of the mobile companies' stock is loss-leader, they're still making some money on the sales of handsets.
Re:uhhh (Score:2, Interesting)
Sounds exactly like a Swiss army knife to me. It's really cool that a Swiss army knife can cram a bunch of gadgets into a compact form factor, but that comes at the cost of none of the gadgets doing a very good job. I have a real knife for when I want to cut things and a real toolbox for when I want to fix things. About the only thing that my Swiss army knife is good for is as a nicknack to keep my hands busy when I'm thinking.
YAWN! This is already reality in Japan. (Score:2, Interesting)
See data comparing mobile downloads and iTMS here [fasol.com].
Let's get our heads out of the sand, now shall we?
Re:Pre announcements (Score:3, Interesting)
Don't talk to me about motorola's "expertise" (Score:2, Interesting)
- takes longer to boot than my XP desktop
- flaky power/headset connectors, my phone sometimes doesn't charge during the night, and half the time I have to disconnect the headphones to have a conversation
- volume is too low, without headphone or hands-free I have trouble hearing what my correspondents say
- screen illegible in bright sunlight
- phone makes all king of noises, especially at boot, even in silent mode, so I do look like one of those obnoxious idiots
- the USB synch software doesn't work, I tried on 4 different PCs. And got no support.
- typing SMSs with their "assist" feature is actually slower than without it
- the phone is incredibly sluggish, kind of always looses the first key typed when it's in sleep mode, and for some reason I can't wrap my brain around that
- I'm still waiting for the bigger RAM cards that were promised for January
On a brighter note, the UI is nice (though slow), there are nice "classic phone" ringtones, the unit is solidly built.
I'm thinking of junking it, though.
Mmmmm, actually feels good to vent my frustrations
Re:Pre announcements (Score:4, Interesting)
Actually, the real reason is that the land line infrastructure in the US isn't the complete crap it is in other countries. I've been to a lot of countries overseas and worked with quite a few foreigners here in the US. I know that, at one time, it would take up to six months to get a land line phone in Germany. The union got the government to make it illegal for anyone else to hook up a phone, and they would dig a new trench from the box to your house for every new hookup, then dig it up when you had it disconnected.
And from what I've heard, the situation in India was dire.
So if you're blaming government monopolies and stupid monopolies, you're partly right, but probably not in the way you thought.
As a Moto V710 "user" (Score:3, Interesting)
I wouldn't blame apple (Score:3, Interesting)
Svelte is good, features are good, but they're worthless without stability.
Re:Pre announcements (Score:4, Interesting)
The thing that the breakup was supposed to do was to take an excellent phone system and make even more excellent. The idea was that providers would introduce digital services to compete with each other. In point of fact it was probably the worst thing they could have done to promote digital services. There was very little effort to promote digital services, since supporting them was expensive. People who insisted on getting ISDN soon found the telcos were terrible at provisioning and supporting the services because they hadn't made the investments in training and staffing needed to do a half way decent job.
The choice for a telco was simple -- spend money convincing people to buy into an expensive service they didn't understand and then spend tons of money to support it, or compete on price. Well, the rest as they say is history. We've had over a incredibly low prices on phone calls, and only recently had telcos competing to bring digital services to the home through DSL.
The thing is, while we clearly benefit from cheaper calls, and Internet technology is probably more flexible than ISDN, it has come at a price. Life is more complicated. Nobody had to understand anything like a "calling plan", unless you were a government regulator. The cost of figuring this out and managing telephone use in business has to be set against the direct cost savings. This is not to mention the horribly pushing telemarketers trying to get you to switch to some fly-by-night telephone company, which was the spam problem of the 80s.
There's a net benefit of course, but I suspect that most of us when we are on our deathbed would probably like to have the time we spent comparing calling plans back. Heck, I'll probably want my
Re:Pre announcements (Score:1, Interesting)
Re:Pre announcements (Score:3, Interesting)
This is exactly what they are doing. The only difference is they don't have to buy 100,000 at a time. They just have to report which ones they sold and collect their check.
It is a zero inventory resale business. The cost of goods sold calculation is NOT more involved, if anything less involved. With a physical product you have to put in warehouse costs. Shipping and recieving labor. Inventory shrink costs. RMA costs. Markdowns costs. the list goes on.
None of these costs are involved with iTMS. Instead they have other costs such as bandwidth (which online retailers also have to deal with) and system admin costs )which also online retailers must have) and development costs (which again, retailers must deal with)
There isn't much special about iTMS to any other ecommerce business other than the fact that their costs are significantly LOWER Than any other physical product reseller. So trying to argue the OPPOSITE doesn't really make much sence.
You can criticise my understanding of supply chains and reselling business and revenues and costs all day. it doesn't change the fact that your argument is not supportive of iTMS's reality. If you are trying to say that iTMS has more costs than an online retailer of physical products, then you must have no faith in Steve Jobs as a CEO.
Re:Pre announcements (Score:3, Interesting)
You can, as long as the carriers in question are using the same technology, and you didn't benefit from a healthy subsidy on the phone. Go buy a full retail-priced GSM phone, and get a SIM card for whatever carrier you want to use. Buy a full price CDMA phone, and you can have whatever CDMA carrier you want service it.
It's the subsidies that the carriers provide on handsets that create most of the problems. They've spent a lot of money on you up front, and they want to get that back. You can't blame them for that, but it sure makes life a PITA for the rest of us. I spent the time researching how to get pictures and ringtones on my phone without paying my carrier for it, and many others do the same.
It seems though, that given the money people have been willing to cough up for an iPod, that perhaps Moto should release the damn thing unlocked and let early adopters fork over the cash for it. Once there's good buzz around it, the first carrier to give in and subsidize the phone will get a lot of people who want it, but didn't want to pay full fare.
Re:Pre announcements (Score:3, Interesting)
b) You can't get those phones here because the network infrastructure here doesn't support them. Economics of scale...Hong Kong=small; US=way bigger -- that technology doesn't come for free or deploy to rural areas by itself. It works in Hong Kong due to the population density.
c) Cell phone companies don't control what price cell phone manufacturers charge for phones
d) Contracts aren't manditory; people get them because they're a good deal
e) I've never had a problem with available features or service