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Awaiting Apple's Next Big Thing
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Awaiting Apple's Next Big Thing

Technology

Awaiting Apple's Next Big Thing

Awaiting Apple's Next Big Thing
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Apple plans to unveil a new product next week. Many industry watchers expect it will be a cell phone that also acts as an iPod. How would such a product change the mobile phone landscape?

STEVE INSKEEP, host:

This may be the most talked about consumer electronics product around right now. And the only thing is, no one has actually seen it. Rumor has it that Apple Computer may be about to release its own cell phone that plays music.

As NPR's Laura Sydell reports, it may be almost impossible for the company to live up to expectations.

LAURA SYDELL: Like most of us, James Stoup has a lengthy list about the design flaws he's encountered in the various cell phones he's owned over the years.

Mr. JAMES STOUP (Columnist, AppleMatters.com): One of the worst things are the menus. It's like, I don't know, designed by committee or by a blind guy or someone with no sense of style. I don't know what it is, but they're, you know, the menus are really hard to access and they're not intuitive and things are in multiple places.

SYDELL: That's just to name a few of Stoup's gripes. Stoup is a part time columnist for AppleMatters.com, a sight about all things Apple. Stoup says for months rumors have been circulating on the Internet among Apple fans that the company is going to release a phone that plays music, or an iPod that's a cell phone. To fans like Stoup, the Apple cell phone is like what Senator Barack Obama is to certain rank and file Democrats who want their party to win the White House, an unknown vessel into which they can pour all their hopes and dreams. If Apple does come out with a phone, says Stoup...

Mr. STOUP: It's going to be really cool. It's going to be usable. It's going to be fun. It's going to have that Apple coolness attached to it, that aura of just ooh.

SYDELL: And that's an idea that is probably not lost on other electronic companies, many have tried and failed to make a cell phone with a music player that catches on with consumers. When it comes to the release of an Apple phone, other manufacturers might be feeling...

Mr. PHIL LEIGH (President, Inside Digital Media): Fear and loathing.

SYDELL: That's Phil Leigh, president of the consulting firm Inside Digital Media.

Mr. LEIGH: If Apple is able to capture the kind of market share in that sector of the cell phone market like they have in the iPod market, then all the other manufacturers are really going to be in trouble.

SYDELL: When Apple released the iPod five years ago there were many other MP3 players on the market. But Apple made one and created an online music store to go with it and quickly became the leader. The company now has more than 75 percent of the MP3 player market in the United States, according to Leigh, and he says the cell phone market is much larger. Some 800,000 phones are sold each year.

Mr. LEIGH: The market potential for cell phones to play music is huge. As a result of that, it's an attractive market for Apple to enter, particularly with a phone that has the potential to become the standard.

SYDELL: Many Apple watchers, including Leigh, are predicting that the company will announce a music player cell phone at the next Macworld in San Francisco on Tuesday. Analysts say it's an opportune moment because the company's had some bad publicity recently. It's been under investigation by the Securities and Exchange Commission for hiding the backdating of stock options. But getting into the cell phone business will present new challenges for Apple. Chris Crotty, an analyst at iSuppli, says the company could offer its own wireless service by purchasing it wholesale from another provider, but...

Mr. CHRIS CROTTY (Analyst, iSuppli): It would require Apple to operate as a service company versus a product company, which is something they've never really done before.

SYDELL: Offering wireless is a far cry from operating the iTunes Store. Apple could also make deals Cingular, Verizon or another wireless provider the way Motorola, Samsung, or any other cell phone company has. The Apple phone might become part of a package deal with service. But James Stoup of AppleMatters is skeptical of that approach. Stoup says Apple is a company with great products because it keeps the quality control in the hands of its own employees.

Mr. STOUP: If they can't control the entire user experience from start to finish, then it won't happen. If they have to cut a deal with a carrier who's going to, you know, you have to carry this and you have to do that, and we have to be able to - no, they won't do it.

SYDELL: Apple is notoriously secretive about its inner workings. But obsessive observers, of which there are many, say they've read the tealeaves or at least the computer code in the iPod and recent patents taken out by Apple. They say all the signs point to the imminent release of the cell phone that plays music. But Apple CEO's Steve Jobs also loves to surprise. For that reason alone, some say the company could wait just a little longer, leaving Apple fans to linger with their dreams of a perfect Apple music phone unrealized.

Laura Sydell, NPR News, San Francisco.

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