More Analysts on Apple's Upcoming Launch: Part II

In order to give everyone equal play, here are some more analyst quotes in the news regarding Apple's September 7 launch. The RED HERRING takes the viewpoint that the impending iPhone will not be as succesful as the iPod.

Pacific Crest Securities analyst Steve Lidberg said, "From an Apple perspective, [the phone] is an incremental positive, but I think Apple is more tied into developing technology for the iPod. I do think there will be an iTunes video download service introduced before the end of the year. But a video iPod likely wouldn’t debut until at least early next year, since in talking to components suppliers, I don’t think the technology is ready for a video iPod."

Noting most handsets have limited memory on board and potential battery issues, Forrester's Charles Golvin said, "The right model for this would be, you can use it to grab some music before heading out the door or going on a two-day trip."

On the topic of iTunes and DRM, Albert Lin at American Technology Research said current phone technology “isn’t powerful enough do what Apple requires for digital rights management. Apple would have to make iTunes more open," he commented.

Lin thought the current 99 cent cost for a songs on iTunes wasn't sustainable for everyone to make a profit. He thought it would havee to be in the $1.50 range, “which would be too high a premium to pay for the convenience of downloading a song onto a phone," he remarked.

Golvin countered that a bundle model might work such as allowing "consumers to download a favorite song and get a ring tone version, all for the price of a carrier download."

Over at InternetNews the analyst who scooped the Apple, Motorola and Cingular deal, Ovum analyst Roger Entner, held forth on the launch. He believed OTA music downloads was critical. "That's how Cingular really makes money. Just having an iTunes phone and not the capability of selling songs over the air is pointless. Music will be such a significant revenue opportunity," he said.

Jupiter Research analyst Joe Laszlo pointed out that in the short-term, "A consumer looking for one particular track from one particular artist will be in for a lot of tapping and scrolling. Down the road, I expect cell phones and digital content to work well for impulse buys, such as getting an SMS that says, 'We know you like Shakira; would you like to download a single from her upcoming album?' There's definitely some money to be made from that."

Laszlo suggested the "right price point would probably be that of the iPod Mini, or around $175." Even though cell phone are subsidized in the U.S. market, "With the Apple and iTunes brands involved, it increases the odds you can shift the consumer mindset away from the cheapest price possible to, I want something cool. If the price crosses the $200 threshold, it becomes something many people want, few people buy," Laszlo added.

Entner believed the launch would have the greatest impact on the portable music device industry. "It was foreseeable that the music player market would go same way as the camera phone. The only thing that will be left in three or four years will be the $5 MP3 players from China. Everything else will be the cell phone," he opined.

Lastly, on the Technology Pundits blog, Rob Enderle takes a different tact. He thinks the device will be brilliant and wonders:

The question will be whether this is an MVNO (Mobile Virtual Network Operator) or a cell phone pure play. An MVNO, like the one Disney just created, would give Apple much more customer control and they really favor that, while the cell phone pure play would be vastly easier to do but put them in a subservient position to the carriers and Apple doesn’t do subservient well. Still it would be less risky and that was the path they were on until they discovered the carries wanted a piece of the music business and realized that customers probably wouldn’t pay that extra tax for long.