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Apple is intent on making iTunes indispensable beyond media sales and playback. In update emails Tuesday, Apple (full text) and AT&T warned prospective users the expensive phone they lust for won’t meet expectations without an iTunes account. Translation: without a credit card on record, don’t expect much. The application is required for syncing music and video — and, of course, you need it to get an account. True, most of the first-ins probably already have iTunes and are likely to have an iTunes account. (This takes Microsoft’s Passport/Windows Live ID one step further by linking access to a credit card. It would be the equivalent of requiring a Zune or Xbox Marketplace account before activating the abilities of Windows Mobile 6 on a smartphone.) This way, Apple can have a retail relationship outside of AT&T — a vital step, especially for a company for which control is as important as the product itself. When you get to this point, iPhone is beginning to look and sound like an MVNO that isn’t labeled as such.
The email also talks about syncing address lists and the like but it skips some of the important details people usually want to know when they buy a phone including the return policy. An AT&T spokesman I talked to today wouldn’t confirm that the policy will be the same as Cingular/AT&T’s usual 30 days, saying that and most other service-related details aren’t coming before the launch. I asked whether there were plans to separate iTune customer support from other products sold by AT&T. No details. Service plans? No details. You get the picture. He did try to promise clarification about current AT&T customers who are still shy of being able to convert their current account to the required new two-year contract.
DJN: Andy Hargreaves, analyst, Pacific Crest Securities: “ITunes is their broadest distributed product, and they are trying to leverage it any way they can.”
B20: ” … from a business perspective, this is a smart move on Apple’s part. It would be bad if AT&T were the only company that had a continuing billing relationship with the customer