Motorola's iTunes Phone Closer to Reality?

This past weekend's V Festival in the U.K. has come and gone without nary an iPhone siting. However, with Motorola's recent FCC approval for the E790 iTunes cell phone, the much-hyped music phone might finally see the light of day in the near future.

Mac News World reports that analysts believe the "phone will not replace iPods or steal market share", but will be complementary device, like the Shuffle, that lets iPod users take some songs with them on their phone.

Jupiter's Michael Gartenberg on why the phone has taken so long to come to market said,"My guess is that the relationship between Motorola, Apple and a carrier -- and having to come up with something in harmony -- is what's taking so long."

Most analysts concur that Motorola has a good chance at success in the nascent mobile music market.

David Chamberlain at In-Stat said, "The market has barely started to mature, hobbled by a lack of handsets and an inability to handle the sticky digital rights management issues. In Japan, full-song downloads are a significant source of revenue for KDDI's Chaku-uta service, and DoCoMo is starting to offer music downloads on its 3G FOMA network."

"There's definitely going to be a market, and I think it's going to be a successful product," Gartenberg remarked.

According to NPD research, "20 percent of digital music buyers also have paid for ringtones, which is nearly four times the rate of the general population." Earlier research from In-Stat claimed 9.4 percent of mobile phones users wanted to play tunes as well.

"This tells me there's a huge crossover population between cell phone users and digital music buyers,"said Isaac Josephson at NPD Group.

Chamberlain added that people "were willing to pay extra for a phone that had the capability and were also willing to pay quite a bit for the files themselves. Only half of those wanted to purchase and download the music over the carrier's network."

I think a better market opportunity exists for an Apple-related music phone than a carrier/music industry model that believes consumers will be willing to pay more than 99 cents a song for the privilege of hearing it on their handset. However, we'll have to wait a little bit longer to see how it plays out. Plus of course, the Moto E790 actually has to make it to market, and we know how long that can take...