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September 07, 2005
Where's the revenue stream?
Posted by Sandy
Suppose 10,000 people buy a ROKR phone this week.
Motorola would profit from 10,000 handset sales. Cingular would profit from 10,000 two-year wireless contracts.
Where's the money for Apple?
The iTunes Phone has no direct link to the iTunes music store. You can't use it to buy music from Apple. Sales of the iTunes Phone will not lead to mass purchases from the iTunes store (not without a computer, anyway).
As Jobs said today, Apple thinks of the ROKR as an iPod shuffle on a phone. That quote alone leads me to believe that Apple is getting (or should get) a cut of the profits from every ROKR sold by Motorola.
It's possible that Apple has simply donated the iTunes software to the ROKR in order to drive customers to iTunes (and/or away from competitors). If the iTunes store is selling 1.8 millions songs each day, maybe Apple can afford to give away the player in order to sell the music.
Or not. It's more likely that Apple profits from each ROKR sale.
Comments (2)
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1. Jeff on September 8, 2005 07:04 PM writes...
Remember, they've upped the ante considerably for anyone else who wants to get into the music download business.
Thats worth a fair amount, I'd expect.
Permalink to Comment2. Jim on September 8, 2005 10:28 PM writes...
And where are the supposed OTA downloads for $2 a pop? This didn't make sense to me since why would anyone not simply sync with their computer? Of course, OTA sales are exactly what the phone companies would love (and one reason they block BlueTooth transfer capabilities on some phones). The ROKR is somewhat underwhelming but at least Apple and Motorola didn't screw the buyer to have to spend more to listen to the songs they already have.
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