Wednesday, June 14, 2006

Apple Cell Phone 'Inevitable,' But Not Imminent reports that American Technology Research analyst Shaw Wu recently wrote in a client research note that "While we firmly believe that Apple (AAPL) has been working on cell phone technology, we believe its much hyped imminent entry is overdone."

Wu pointed out that for" Apple to enter the U.S. cell phone market, it would need approval from the Federal Communications Commission. A filing would be required at least three months prior to an actual product launch. So far, Apple has applied for and received WiFi and Bluetooth approval, but there is no sign of cell phone activity yet."

Wu believed "it is "inevitable" that Apple and other PC manufacturers enter the cell phone market over the next few years for both offensive and defensive reasons, but also for the simple reason of convergence. He said Apple could enter the market as early as mid-2007, but more likely in 2008 or 2009." In the meantime, he expected "Motorola (MOT) to continue introducing iTunes cell phones."

Wu added "We see the next large frontier in cell phones as they become more 'smart,' gaining more PC functionality like internet access, playing music and video, and other application."

Wu thought "one of the issues Apple is taking some time to figure out is its go-to-market strategy. It could participate the traditional way by partnering with carriers like Cingular Wireless, which is a joint venture AT&T (T) and BellSouth (BLS)."

Wun thought "more likely is the prospect for a vertically integrated model that would give Apple tighter control over its user experience, similar to both its iPod and iTunes and Mac businesses."