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Summary:

Motorola’s iTunes phone is on hold for now, thanks to poor signal quality from the carriers. Frankly, why is anyone surprised that carriers are trying to make sure that the iTunes phone sleeps with the fishes? The stunning Rokr no-show at two of Motorola’s prime product […]

Motorola’s iTunes phone is on hold for now, thanks to poor signal quality from the carriers. Frankly, why is anyone surprised that carriers are trying to make sure that the iTunes phone sleeps with the fishes?

The stunning Rokr no-show at two of Motorola’s prime product showcases offers a behind-the-scenes glimpse at the power struggle between phonemakers and the phone companies that want to play a big role in the music download business. “This is a manifestation of conflict we’ll see more and more as the phone takes on additional functionality,” says Yankee Group analyst John Jackson.

In past two years, thanks to consolidation in the wireless marketplace, we are left with a dozen odd carriers who dominate the wireless planet. Last year they tried hard, and succeeded in making handset makers become nothing but glorified ODMs, and now the iTunes saga. Wireless giants have created a walled garden around their phones, and are trying hard to keep everything out of that garden that hasn’t been approved by them, or doesn’t get them a few shekels.

iTunes, is a clear and present danger to the music services most of the carriers are offering. Never mind, that most of these services are as likely to succeed as Kansas City Royals winning the World Series. Being phone companies, they have not figured out the whole “user experience thing.” Secondly, they are battling with the record companies over who gets to keep how much out of online music sales. And lastly, if you have tried to get music onto your cellphone, well you know that’s easier than trying to replicate Emeril Lagassee’s cooking in a kitchen with one pot and two pans. I have attempted that on a Samsung p777, Sony Ericsson S710 and a sundry other phones. Its a painful process, and well not even worth the effort.

And if that was not enough – I have spent $2000 buying music from either Apple or Music Match stores. And if I have to pay for the same 50 Cent track again, well I am not even going to bother. So if the wireless operators want me to buy their high end phones with music features etc, well they make sure I am happy. And as a consumer, there are still four options – I can still go with the one which keeps me happy.

As an aside, if I am carrier looking to add a few million subscribers, all I have to do is add support for this iTunes phone, order 500,000 of these units and see a huge migratory herd switch to their service. Any takers? T-Mobile, here is your chance – after all you don’t have a 3G network to offer digital music downloads anyway! Don’t wait – this could be your big chance!

  1. I wrote about this coming battle back in September 2004:

    http://www.mediathinking.com/comments/P127_0_1_0/

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  2. I agree totally. I too want to announce that I will switch to whichever carrier allows me to use iTunes Music Store songs on my phone. Which one will you be?

    Cellular carriers are afraid of becoming like cable/dsl/satellite carriers, being pushed out of to the content revenue stream and being pushed to offer cheaper fixed rate 24/7 plans. Can you imagine if Comcast was able to get a cut of iTunes sales?

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  3. On another tangent of Walled Garden. The inability of carriers to create a walled garden in Internet-land is the reason they have been dragging their feet. They need more revenue from the big new higher-speed last mile network they need to build. Revenue from applications (like iTunes in previous post), network delivery, and appliances would be great. Unfortunatley for them they do not have the resources to invest in all 3 layers of the service or to control these applications via a walled garden. The Yahoos, Googles, E-Bays, Amazons, iTunes, and soon to come download video services will continue to define the internet applications and consumer electronics industry will dominate the applicances. Carriers can try to to impede this (and edge router vendors are happy to help them and all the 3-Play models have loads of walled garden attempt features) but the only carrier walled garden play in Internet-land is via lawyers and regulation.

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  4. more than the resources i think its the mind set which is key and important. the carriers being carriers cannot and will not be able to develop services they think they can. they simply think too much like phone companies unfortunately. that my friend is the reason they are going after the walled garden approach to everything

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