WSJ Examines Threats to iPod Posed by Cell Phones

Christopher Rhoads and Nick Wingfield write in Mondayis edition of The Wall Street Journal that Appleis popular iPod faces challenges from "an entire US$100 billion industry" -- namely, the cell phone business. While Apple has announced an iTunes-compatible phone in conjunction with Motorola, the reporters note that a joint venture of Sony and Ericsson will soon release a Walkman phone, which they view as a potential threat to the iPod brand despite the fact that Sonyis attempt to directly engage the iPod with its Walkman MP3 player fizzled.

Rhoads and Wingfield point to a recent Jupiter Research survey showing that 76 percent of respondents carry a cell phone regularly, while only seven percent said they usually have a music player with them. Those statistics prompted Cingular Wireless vice-president Jim Ryan to tell the reporters: "We are bullish on the opportunities. Why carry multiple devices?"

The writers also point to sales numbers: last year, U.S. consumers purchased 80 million cell phones and seven million MP3 players. Convergence is a tricky business, however, and thereis no guarantee that users really want one device that does everything. As Jupiter Researchis Michael Gartenberg told Rhoads and Wingfield: "Itis hard to view the music phone as a direct threat to music players, any more than camera phones have put cameras out of business."

Appleis biggest obstacle seems to lie with the fact that wireless carriers want to be the ones to sell content to their customers, and the first iteration of Motorolais iTunes phone will only be able to download music from a computer to the device. If Apple does want to eventually sell music to users via their cell phones, they will face a struggle with the carriers.

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