The two technology companies have been working to finalize their agreement on the iTunes-capable handset.
Revenue sharing has been the big hurdle for tech powers Apple and Motorola over the iPhone handset Motorola has developed. Originally slated for earlier this year, the phone has been delayed several times and no debut date had been set.
Motorola had planned to show the new phone at a trade show in March. But a disagreement with Apple over how product launches should be done, rather than any money issues.
Another factor, which Motorola denied, could be a lack of interest in the iPhone. If the phone were going to only allow for over-the-air purchase of songs from iTunes, there would be more interest from wireless providers.
But the iPhone will reportedly work by syncing to a computer for transferring songs as well. Without an enforced over-the-air component, which would be a revenue generator for the wireless companies, mobile service providers will have minimal interest in adopting the iPhone or similar products to their handset lines.
Cingular has seen great interest in the Motorola RAZR phone, which it exclusively sells in the US market. Those sales have boosted Motorola as well. A compelling hardware design for the iPhone should garner similar interest.
Making over-the-air music sales profitable for everyone involved will be a different issue. The market leader in digital music sales, Apple’s iTunes Music Store, only makes about a nickel per song. Music labels gobble up the bulk of the sale, at 65 cents per song according to analyst firm Piper Jaffrey.
Cingular and other wireless providers will likely sell a monthly “subscription” that allows users to perform music downloads from iTunes or other music services. Downloads would consume part of a user’s monthly minutes. Heavy users may be compelled to purchase higher priced wireless service plans to have more minutes available.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
