The Apple Phone Roadmap

by James R. Stoup Sep 12, 2005

This article will not be about the iPod Nano.

You may now cheer with unrestrained adulation.

Feeling better? Good, then lets move on shall we? If you have taken the time to keep up on tech related news recently then no doubt you have heard about that little event Apple hosted last Thursday. Unfortunately most of the event recaps, analysis, blogs and water cooler conversations have looked something like this:

[nameless poster 1] OMG! Did you see the new iPod! It is so cool and tiny and cheap and wonderful. Why I heard that the angels themselves started to sing as Steve introduced it in San Fran.

[nameless poster 2] Yeah, they will sell millions of them firmly entrenching themselves in the market and generally flipping the bird to the competition.

[nameless poster 1] It is just so cool. It comes in black and with Harry Potter crap on the back. I think I am going to buy 4 of them.

[nameless poster 3] Did you hear that they bought up 40% of Samsung’s stock of flash memory?

[nameless poster 2] Really, that is crazy.

And so it goes on and on for pages. Every writer raves, predicts and raves some more (with good reason mind you) about the nano. Then, as less than an after thought, they throw in this line. “Oh, and Apple also released a phone or something, but it’s crap. Hey, did you hear about the Nano?”

And that is all well and good, that enthusiasm for the new iPod. I too think it is a spiffy product that rightly deserves the attention it is getting. But please everyone try and remember that Steve also introduced a phone. Granted it wasn’t as cool as the new iPod but it deserves some consideration none the less. And so that is what this article is about. I am refusing to talk about the iPod Nano anymore and will focus all of my predicting powers and the new iTunes enabled phone. So prepare yourself because as of now you are entering an iPod-news free zone.

Some pundits feel that the new phone is a kind of dead end of sorts. They have that “well, that’s finally taken care of” attitude. In short, they are glad that Apple finally did what they did but since it really doesn’t effect them all that much they would prefer to get back to more important things, like talking about the new iPod. But I feel quite the opposite. I think that this step into mobile phones will ultimately be considered much more important than the release of a new iPod and here’s why.

As far as I can tell Apple, in the vague and murky future, will find themselves with a decision of sorts on their hands. They will reach a point in the mobile phone market where one of three paths must be chosen.

1. Apple as an add-on This policy just continues what is happening now. Nothing too innovative is done with their iTunes phone product line but rather they update it just enough to stay competitive. In this choice the phone exists as a marketing tool designed to sell other Apple products or services. Apple continues to have little control of the phone’s design and keeps it well away from it’s much more profitable iPod line. In this scenario Apple only stays in the market to prevent other companies from gaining a foothold. They don’t really want to expend the energy needed to dominate it just enough energy to ensure that Napster et al can’t make any real gains.

2. Apple gets proactive Here we see the original announcement was just the first step in Apple starting to dominate a new market. In this case Apple collaborates with Motorolla to create a very “Apple-ish” looking phone. Something that, like the iPod, is automatically recognized. They further extend the phone’s features by allowing you to purchase songs from the ITMS and downloading it to the phone via your service provider’s network. Apple sells the phone on its website and invites Cingular (or who ever) to setup shop inside of Apple’s retail chain of stores to further promote its new offering. One would also expect several variants of the new ROKR phone to emerge set at key price points. I can only imagine that something like this would occur if some of Apple’s rivals started making serious headway in this space and thus Apple could no longer continue it’s defensive approach to the mobile phone world.

3. Apple becomes Sony In this highly unlikely case Apple decides that it wants to become a serious player in the electronic gadgets world and officially throws the gauntlet down. In this scenario they design their own phones, sell their own phones and then become a carrier themselves, selling the entire widget as it were. Make no mistake, this would be a colossal undertaking. Apple would need to restructure their company to do this because entering the mobile phone market would require a wholehearted commitment if it were to work. Just the number of phones they would have to produce and sell would vastly overshadow the number of iPods sold, and that is taking into account the rather generous growth in the MP3 player market. In short Apple would morph into a very different company than they are today. Sure, they would also sell computers but a huge chunk of their resources would be tied up in the consumer electronics division of the iPod and iPod phone. So could they do it, probably. Will they do it, very doubtful.

And there you have it, a little analysis of Apple’s future in the cell phone market. Personally, I think they will go with a toned down version of option 2. In that they will eventually redesign the phone and add the option to buy music directly but will be hesitant to do much more. Counting on the iPod and Macintosh lines to make them more profit than the phone industry will. But once again that prediction is based on two things. First, the market for music on a cell phone will only increase and second, that some other company will at least somewhat challenge Apple and thus forcing its hand.


  • Number 3 is not out of the realm of possibility. Intel has designs on the cellphone market with their chips. Intel has Wi-Fi and it’s future iterations that make the connective world possible. Intel doesn’t have a company that can sell these technologies. Apple could be that company. Imagine Intel’s “Handtops” being new Newtons with cell phone capability. Essentially Treo’s, How hard would it be for Apple to create a Skype like service, add it to .Mac and charge monthly fees. Splitting the company isn’t out of the question as well. As the success of the iPod continues, Shareholders may well start to ask that the iPod division is split off from the rest of the company.

    mcloki had this to say on Sep 12, 2005 Posts: 25
  • Good People! This is NOT Apple’s phone! Apple did NOT design it. Apple did NOT manufacture it. Apple is not even selling it, AFAIK. This is MOTOROLA’s phone! They designed and manufactured it. If you look you will not find an Apple logo on the product. You will find only find a Motorola logo (along with a branding of whoever the cellular service is being provided by). If you read Apple’s official page it will become clear that, to Apple, the Motorola ROKR is nothing but an embedded solution for their iTunes software. Apple licensed the use of their iTunes software and integrated support for Motorola’s phone into the desktop versions. (Please read the last two sentences until it becomes clear).

    Apple will not be evaluating anything much less the three fundamentally flawed scenarios the above article presents. If you want the ROKR to be evaluated you need to go to Motorola. With Apple, you are barking up the wrong tree.

    Apple only made the mistake of having their name so attached to the hype, that everybody thinks it’s their phone. It’s NOT! And articles like this, appearing everywhere, only propagate that misunderstanding. Apple, the company, IS NOT IN the cell phone market!

    macinfan had this to say on Sep 12, 2005 Posts: 2
  • To macinfan:

    You’re correct…to a point.  Apple is not in the phone market.  It is in the mp3 player market, and as phones become more and more capable of playing music Apple will be forced to compete with them, at least as far as the music playing part goes.  Therefore, this venture with Motorola is very important (It’s not apple’s phone but they did make it compatible with their software), and that’s why it and other plausible options for Apple are getting so much press.

    alexpasch had this to say on Sep 12, 2005 Posts: 16
  • Thanks macinfan smile
    The reason the ROKR is “so duh” is that.. well, there’s nothing special about it. It gets recognized in iTunes, so what? Once this little piece of software is on *every* Moto phone it might become interesting. And Samsung’s phones, and Nokia’s phones, and, and Palm’s phones, and Blackberries, and dare we propse it, Sony Ericsson’s phones. There’s a lot of diversity on the phone market because people have very different needs regarding their phone.
    I will for sure not decide on my phone on the subject of it syncing with iTunes, but it would sure be nice to have. Where is iTunes for Symbian?
    What is important, and what I would love to see for a start is a phone that has full OS X sync. Nothing fancy, just full sync. Addressbook, iCal, maybe Mail, and *all the categories*. I am not aware of a phone that will sync categories with OS X. What you get is “somehow somewhat” sync. And please, “somewhat somehow” has no place in my Apple product experience. So this is the phonemakers fault? Well sure, but how long did it take Apple to put out the teeny little Symbian app that now makes sync a breeze (while still ignoring categories)? Years! Why?!

    Bad Beaver had this to say on Sep 12, 2005 Posts: 371
  • Apple wifi voip phone anbody? I dont think we will ever see an Apple cellphone. But a future wifi enabled ipod (or vpod) that could be used as a voip phone could be a possibility.

    jedda had this to say on Sep 12, 2005 Posts: 5
  • The big problem with the ROKR, is its too little, and pretty much too late. Ok, Apple is doing nothing more than protecting sales of iPods with it, they have no interest in the phone actually being useful as that would decrease sales of the iPod. So its crippled…BADLY. The 100 songs, the USB1, the lack of licensing to allow users to download directly to the phone. If they wanted to do it right they could of, obviously though they didn’t.

    People can criticise Moto for all the issues with the phone, but really is it? Or is it Apple simply protecting the iPod? Moto also make phones like the e1000 and Sony have the K608i which, with the correct providers (like 3 and Vodafone) is allowing music (and music videos and other videos) to be downloaded directly too them. Fine they don’t support iTunes, but then again they support near on every other file format, MP3, WMA, MP4, ACC…and MPEG4 and WMV video.

    If Apple had really wanted to make an impact on the phones they could of. All they needed to do was open up the licensing for iTunes to playback, and download onto the phones, even via the phone network itself. It would of been good for users to have the ability to share there music to there phone they already own, and also easier for them to acquire it over the phone network. Apples chose not too and are more interested in chasing cash and protecting the iPod.

    I don’t think they have given up on the phone as yet. Its just probably going to take them longer to get someone to make it for them, and to arrange licensing with the carriers to share the cellphone networks much in the way that Virgin Mobile does it. Then they may be able to actually sell an actual iPhone under there own label, and be able to do much of what users wanted from the ROKR without loosing sales.

    Nyadach had this to say on Sep 12, 2005 Posts: 29
  • The Motorola Razor is much too hi-tech to fit in with Apple’s look, and the ROKR looks just like any other phone out there. Boring.

    The only phones I’ve seen that come close to Apple’s level of design are from Sony Ericsson. Specifically, their “candy bar” style phones, such as the T61x. The Black / Silver T61x was everywhere at the Apple WWDC this year.

    Unless Apple actually designs their own hardware, my next cellphone will be another Sony Ericsson.

    Scott had this to say on Sep 12, 2005 Posts: 144
  • Nyadach made the key point here: this is half-hearted effort on Apple’s part because they are protecting their iPod sales.

    Everyone seems to agree that Apple makes very little (some suggest they even lose money) on the iTunes Music Store.  iTunes however is important because once someone purchases music from ITMS they are locked into using an iPod.  Apple makes ALL money from iPod hardware sales not iTunes.  So if this is the case why would they want to allow devices from other companies (like this motorola phone) to replace iPods as the iTunes compatable music player of choice?

    This phone is simply there to prevent somebody else from getting their first and to get more people using iTunes so they’ll buy an iPod when they realize that 100 songs on a crappy phone isn’t enough.

    This is why everyone is suggesting that Apple might try to make their own phones eventually - they wouldn’t have to give any money to some other company like Motorola.  Hardware sales of iPod are what Apple is making the most money on.

    Ben Markwardt had this to say on Sep 13, 2005 Posts: 6
  • Once phones are uncoupled from the service—then Apple will be able to break into the phone market. Until then, we get crap like the ROKR.

    Nathan had this to say on Sep 13, 2005 Posts: 219
  • ROKR is dull. I still keep on hoping that there is a discern phone that doubles its role as an music player, so that I don’t have to miss incoming calls when I am listening to music. So far, nothing in the market seems particular intersting and attractive yet.

    I think the poroblem with ROKR is that there are two brains involved in the design porocess, one from Apple and the other from Motorola. We all know that ROKR is based on E398, which was originally created as a music cellphone already (it comes with a java music player). E398 highlights the fact that Motorola has its own path on music cellphone, which does not really coincide with Apple’s. On the other hand, Apple doesn’t seem to be too hyped about music cellphone at this moment. Putting it all together, the end product is what we see in ROKR: i.e. E398 + iTune.

    Btw, read my site on nano

    fingers08 had this to say on Sep 13, 2005 Posts: 3
  • You know, what they should of made was this:,main_n91

    Shame they didn’t…but then again it is pretty much an iPod killer though, and as mentioned, would of pretty much messed up Apples income unless it was made by them also.

    Nyadach had this to say on Sep 13, 2005 Posts: 29
  • jedda
    yes, i would like to see an apple wifi phone, maybe using airport networks to interact seemlessly between voip and cell networks.  something along the lines of the comment here:

    the3rdParty had this to say on Sep 26, 2005 Posts: 1
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