iPod nano, iPod phone unveiled
SAN FRANCISCO/NEW YORK (Reuters) – Apple Computer Inc. has unveiled a pencil-thin “iPod nano” digital music player and a long-anticipated cell phone that plays music like an iPod, both aimed at extending its domination of the digital music market.
Apple Chief Executive Steve Jobs also said that in 2006, some 30 percent of all new U.S. cars will sport stereos that can easily connect to the iPod.
The seriously slimmed-down nano – about a quarter of an inch (0.6 cm) thick, 3-1/2 inches (9 cm) long and 1-1/2 inches (4 cm) wide – drew “oohs” and “ahhs” from the audience at the product release in San Francisco, outdoing the buzz generated by the Rokr phone, which some said failed to meet high expectations for design.
The nano players, either all black or all white, are nearly as small as the entry-level iPod Shuffle but sport click wheels and hold up to 1,000 songs.
Apple has about 75 percent of the market for digital music players, with iPod sales about one-third of its total revenue, and Jobs said competitors had set their sights on the iPod mini, which he said was Apple’s best-selling iPod model.
The nano replaces the mini, and Gartner analyst Van Baker said that Apple – which has sold 21 million iPods since introducing them in 2001 – has moved the goal posts farther down the field with the nano. “It changes the rules of the game,” Baker said.
The iPod nano uses flash memory chips to store songs and photos, rather than the hard-disk drives that the iPod mini and the larger iPods use.
Test for music
The Rokr phone is Apple’s long-awaited foray into the wireless realm. Developed with Motorola Inc., it can store up to 100 songs and has a color screen, stereo speakers, stereo headphones and a camera. Cingular will be the first mobile carrier for the Rokr. Several operators in the United Kingdom are expected to offer the phone soon.
But some said the silver phone did not meet style expectations set by Apple’s iPod and Motorola’s slim flagship Razr phone, and others cited its limited song capacity for iPod users accustomed to carrying thousands of songs.
“It doesn’t have the emotive cachet that the Razr or the iPod has,” said Yankee Group analyst John Jackson. “When you whip this out in the bar, nobody’s going to say, ‘That’s a cool device.’”
The Rokr iTunes phone will be available in Cingular stores on Thursday.
No. 1 U.S. mobile service Cingular Wireless, a venture of SBC Communications Inc. and BellSouth Corp., will be the exclusive U.S. carrier of the phone, which it will sell for $249.99 to customers who sign up for a two-year service contract.
Cingular does not make money from the songs played on the phones, but hopes they will help boost sales and reduce customer defections to rival services. One analyst said it could become Cingular’s top-selling phone by next year.
“If this phone is easy to use, at this price I think it will fly off the shelves,” Charter Equity analyst Ed Snyder said. “Cingular will reap the benefits of the combination of Motorola and Apple’s brands.”
The phone does not allow for wireless downloads, but it does eliminate the need for carrying two separate gadgets.
Motorola said the phone would be available in the United Kingdom at Carphone Warehouse Group’s stores in mid-September and with operators such as O2, Orange, BT Mobile, Virgin Mobile this month or next.
In the coming months, it is also expected to be available in countries such as Germany, Canada, Italy and France.
Motorola’s chief marketing officer, Geoffrey Frost, said the phone – the first in a whole family of Rokr devices – would be followed by more stylish designs.
“As this continues to develop you’ll see it become as iconic as our other new products,” Frost said, referring to a new products inspired by its Razr phone.
Flexible
As it tests the market for music on mobile phones, Apple is free to work with other handset makers and cellular service providers, said Phil Schiller, Apple’s head of worldwide product marketing, in an interview.
“We have flexibility to do many things,” Schiller said. He declined to comment on the financial arrangements of Apple’s partnership with Motorola and Cingular.
Music is expected to be one of the hottest new features in mobile phones, which already sport everything from cameras to video players.
Apple has to keep up a steady pace of innovative new music products to maintain the level of growth investors now expect.
Shares of Apple fell 12 cents, or less than 1 percent, to close at $48.68 on Nasdaq. So far this year, the stock has gained 52 percent and trades at about 34 times its projected earnings per share in fiscal 2006. Apple’s fiscal year ends in September.
Apple said it was teaming with car makers Acura, Audi, Honda and Volkswagen to integrate its iPod products into their car stereos for 2006 model lines.
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