It was about three years ago that the mobile industry was buzzing about another handset maker's "converged" device. Like the ROKR, the Nokia N-Gage-which began as a partnership between Nokia and Ninte





Seamus McAteer is chief product architect/senior analyst for M:Metrics.







The recent launch of the Motorola ROKR, which combines Apple Computer's elegant iPod with a relatively uninspired mobile phone from Motorola, seems a bit like déjà vu.

It was about three years ago that the mobile industry was buzzing about another handset maker's "converged" device. Like the ROKR, the Nokia N-Gage-which began as a partnership between Nokia and Nintendo but was subsequently rushed to market by Nokia after a falling out with the portable-console maker-was launched in the wake of elaborate rumors and raucous hype.

The N-Gage received a lackluster response; it was clumsy and incapable of downloading games from wireless networks.

Does any of this sound familiar? Hoping for an "iPod phone," mobile music enthusiasts got the ROKR, a stripped-down digital player that will hold only 100 songs-which cannot be downloaded over wireless networks. The player is encased in a Motorola phone whose design is not nearly as ROKin' as the iconic iPod, albeit vastly superior to that of the N-Gage.

If there was a lesson that Apple should have taken from the N-Gage debacle, it is that a hardware-centric approach will unnecessarily limit its mobile ambitions. Nokia eventually figured out that freeing the N-Gage from its hardware and integrating it with Nokia's popular Series 60 phones was the only way the platform could have wide appeal.

Apple would be wise to consider Nokia's lesson as it seeks to extend its digital music domination into the mobile realm. Instead of relying on one or two pieces of Motorola hardware, it must license the iTunes platform for multiple handsets.

The mobile industry is defined by a multitude of devices. According to M:Metrics data, more than 500 different handsets are in use in the United States. Even the most popular handset-the Nokia 6010-is in the hands of only 3.7 million mobile subscribers, and only 41 devices-most of which are low-end phones-can claim more than 1 million subscribers.

When we examine uptake of the most sophisticated, high-end devices-particularly those targeted at a niche market or those that are exclusive to one carrier-the universe gets considerably smaller.

The most popular of these high-end, exclusive handsets is the Motorola RAZR, owned by about 800,000 Americans. That is only 0.4% of U.S. mobile subscribers. And despite the popularity implied by its ubiquity among Hollywood power players, the Sidekick-offered exclusively by T-Mobile-counts a mere 200,000 owners.
Although Apple can dominate the market for portable music players with a couple of hit devices, this approach does not work in the wireless sector.

Another considerable hurdle for the iTunes phone is device churn. The life span of an iPod is at least twice as long as that of the average mobile phone. Among early adopters, it could be nearly three times as long, and it is doubtful that early adopters will replace their current ROKR with a new ROKR nine months later. Instead, they are going to gravitate to the next fad, be it a phone that takes high-resolution photos or integrates support for multiplayer games on third-generation networks.

The best that Apple and Motorola can hope for with the current incarnation of the ROKR is a 1% share of the market, and that is if the phone is a major hit-an unlikely scenario given its lukewarm reception. For Apple to replicate the success of iTunes in the wireless market, the platform must be deployed on no less than 10 handsets, ideally with a range of price points and with diverse feature functionality.

Once again, Apple has proved itself a trailblazer, and Motorola and Cingular-the sole U.S. wireless operator selling the device-have achieved a marketing coup by basking in the glow of Apple's halo. But I have seen this movie before, and it ended in a train wreck from which Nokia has not fully recovered.


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