Music On Mobile Phones Gets Tasty

Mon, Jul 31st 2006 4:45pm — Derek Kerton

When Verizon first launched their VCast wireless music store, we had some critical observations on the expensive pricing. How would VZW be successful charging $2 a download in a market Apple had defined as $1 a shot? While acknowledging that there may be a mobility premium, we felt that they had over-estimated it, and also were proposing music on phones that didn't measure up to the iPod experience. Even worse were the initial handsets from the telcos (Uhh, ROKR anyone?). But there is value in combining a music player into something that we already carry. A product/service that offered a good music player, integrated in a phone, with reasonable prices for music, and that worked as a integrated system would be a runaway hit, and a threat to Apple (unless, of course, it came from Apple).

Enter the "Chocolate Phone" from LG, now being sold by Verizon Wireless. The Chocolate model has been a huge success in Asia for a while, and sold 1.2 million units in the second quarter for LG, with sales expected to double in Q3. If you remember your SATs, Chocolate is to LG as __~~ROKR~~ RAZR__ is to Motorola. VZW is pricing the phone at a reachable $150 - that's expensive for mass market phone prices, but not a bad deal for a good MP3 player. VZW is also offering a new pricing structure for VCast music which includes elimination of the required $15/mo EV-DO package, the ability to play MP3s as well as VCast downloads, and up to 2GB removable memory. I believe the first credible volley has been shot across the bow of Apple. Your move, Mr. Jobs.

Update: Looking deeper into the VZW website, I've learned that the drop in charges is not as good as VZW would have us believe. Previously, VZW required the purchase of the $15/mo VPak for unlimited browsing and access to the VCast store, but now if you don't have a VPak, all browsing, previewing, purchasing, music alerts, and downloading will be charged "airtime" fees. That's like a retail store charging you by the minute just for being in the store. Then you still have to pay twice the going rate for the songs. The LG device is great, but the VCast pricing still needs some work.

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Andrew, 31 Jul 2006 @ 4:45pm

Apple will not be able to keep a phone a secret
There always seems to be speculation that an Apple announcement of an iPod phone is imminent. However, since any iPod phone will need approval by the FCC before it can be sold in the US, and the FCC puts its approvals up on its website publically, and various people make their living from scouring those approvals, it will not be possible for Apple to make an iPod phone available that no-one knew about before. We will have plenty of warning before they launch one.
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Derek Kerton (profile), 31 Jul 2006 @ 4:45pm

Of Course
Of course it can't be a secret forever. I mean, eventually they have to put it in stores and market it! As for the FCC site, sure, that's just the first place that vendors have to admit publicly their intention of offering a specific terminal in the US. We have www.phonescoop.com to thank for scouring that site. So you're right in general. But your comment is Ameri-centric. Chocolate phone from LG, for example, has been launched abroad for some time, and such handsets can easily hit the market in other countries without ever appearing on the FCC website. But in regards to Apple, you're probably right. It's not likely that they launch in another market first. But what the rumor-chasers are looking for is any sign that Apple is building a phone BEFORE it even appears on the FCC site. I mean, after that, it ceases to be a rumor, yes? But in the case of the iPod phone code found recently, it seems that many people think it could be code used for bluetooth functionality as opposed to core mobile phone functionality.
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Derek Kerton (profile), 31 Jul 2006 @ 4:45pm

More, Fresh ApplePhone Rumors
Strange, phone-like code found in an iPod update software patch: http://www.engadget.com/2006/07/30/iphone-software-found-in-ipod-updater/
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