Analysts Quotes On the iTunes ROKR Phone

In order to save time, I'm just going to compile analyst quotes in one post regarding Apple's iPhone launch today and update it throughout the day.

At Technology Pundits, Rob Enderle posted:

Apple strongest successes have been tied to products they owned from end to end, their recent failure with HP once again showcased how badly they partner. While there is a chance that loyal iTunes users could heavy lift this phone to large numbers it probably won’t have the impact that an Apple designed phone might have had for all three players. Such a device may still be coming, but to us this phone simply doesn’t have enough Apple in it and that will limit its success.

At CNET, Roger Kay at Endpoint Technologies Associates said, "I see the move as largely defensive. A cell phone is not the optimal device for listening to music. Among other things, you need two headsets, one for phone (one ear, with mike) and one for music (stereo phones, no mike)."

Tim Deal at Technology Business Research (TBR) remarked, "The pervasiveness of cell phones in the world makes sense that there should be a relationship of these cell phones and iTunes."

Michael Gartenberg blogging live from the event at the Jupiter Analyst Weblogs, posted:

The phone was pretty much what was expected, it’s a 512mb phone, that’s iTunes capable. No over the air downloads, just the same side load experience as your average iPod. Even the form factor wasn’t news, it’s the same design Steve Jobs showed at the last keynote, there was no mystery here, just what we were pretty much expecting. I’m also not thrilled that there’s a capacity maximum of 100 songs. As we’ve pointed out in the past, the strategy is to complement the iPod contextually and not compete with it and that’s what Apple and Motorola have done. What’s different about this music phone is that it has a pedigree no other device has, namely the iTunes brand and that will serve as a powerful differentiating factor in the market even where there might be more compelling products for consumers.

Gartenberg does ask a great question, "With a $199-$249 price for the Nano and a form factor that’s so small and elegant, you could carry it and a RAZR in your pocket without noticing either, who is the market for the iTunes phone?"

In a Reuters article, Charter Equity analyst Ed Snyder said, "If this phone is easy to use, at this price I think it will fly off the shelves. Cingular will reap the benefits of the combination of a Motorola and Apple's brands."

In Investor's Business Daily, Neil Strother at NPD Group said, "This could be a watershed device that starts the arms race for music phones."

Over at CNN/Money, many analysts chimed in. Mark Stahlman at Caris & Company said, "There are obvious conflicts between carriers and the record companies, so I suspect those negotiations are as much a stumbling block, if not more, than the technology. The deal that iTunes struck (with record companies) has also come under a fair amount of scrutiny –a number of record companies want to renegotiate the deal with iTunes, and some are apparently happy with things as they are."

Stahlman said many major carriers such as Cingular, Verizon, Vodaphone and T-Mobile are all having separate discussions with the record companies about who is going to charge what and how the profits will be shared when customers finally are able to buy music directly from their phones. Also, many of the major networks may not have strong enough networks to withstand that much traffic.

On the carriers negotiating with the record labels, Stahlman added, "Those negotiations are not yet concluded, and so they are holding back the offering of direct phone downloads. The phone itself is not the issue. Phones are accepting downloads every day; there are ringtones and games and all kinds of things you can download over the phone. The downloading of songs into phones will be an impulse buying situation. If everybody who is an Eminem fan decided they want to download the latest Eminem track at the same time, there isn't a cell phone network in the world that could accommodate that."

"The cell phone will compete with a portion, certainly not all, of the iPod product line. There are at least three and soon to become four and five different products that satisfy different needs all under the brand of iPod," Stahlman also remarked.

Charles Golvin at Forrester Research said, "With the exclusive deal that Cingular has, it's a customer acquisition tool for them. In the long term, the revenue life they're hoping for comes from the fact that as people use their phones to do more things, those customers tend to be more valuable. People tend to spend more money on these other services. It's a long-term bet on the changing behavior of these customers."

"Consumers don't really want to carry around more devices than they have to. Everyone has a mobile phone. To get music onto the phone is a big deal for the music industry. Why does Apple care? I think it's because they want to protect their turf. If they can't own the device, they can at least own the relationship. That's a big deal since Apple's the incumbent," commented Ted Schadler at Forrester Research.

At Tom's Hardware Guide, Stephanie Guza at In-Stat said, "My gut right now says that, the way the person would use their cell phone is very different from the way that they're using their music player. I think the music is going to serve as a complement to, rather than as a substitute for, other audio products, at least in the short term. I don't believe that Apple thinks people who have an iTunes-enabled phone is going to disregard an audio player altogether."