Firm: Apple to ship $4.2B in wireless iPods by 2010

New research carried out by the independent research provider, Generator, illustrates that Apple's iPod business could soon give second-tier mobile phone makers a run for their money.

"A lot of people don't realise that Apple's iPod business is already bigger than Sony Ericsson. What's more, Apple is the market leader in a growth market while Sony Ericsson is a second-tier player in a mature industry," said Andrew Sheehy, Research Director at the firm.

According to Sheehy, Apple's scale now means that the company can go out and negotiate deals with suppliers of miniature cameras, video recorders and wireless modems — items normally used in mobile phones — that are competitive with what many mobile handset makers can secure.

"Things change when you're buying in that sort of volume. A lot of people who supply components for use in mobile handsets are licking their chops right now: there's lots of new business up for grabs and we know that people are talking to Apple right now about doing this," said Sheehy.

Although Wi-Fi modems could be used instead, the report explains that the best way to implement a wireless iPod would be via wholesale data agreements with one mobile operator in each iTunes market.

Apart from being able to take pictures and shoot movies with their wireless iPods, users could wirelessly publish their self-generated digital content on iTunes, the firm speculates.

"The mobile content side is interesting but you could also offer knock-out voice service with this approach — Apple could offer free WiPod to WiPod calls, using a Skype-like software application. A lot of people in the mobile industry will be worried when this starts happening," Sheehy added.

Last month, iPod chipmaker PortalPlayer said it had teamed with wireless solutions provider CRS to deliver Wi-Fi and Bluetooth connectivity on its next-generation system-on-chip scheduled to make its debut in the second half of the year.

The San Jose, Calif.-based PortalPlayer, whose system-on-chip audio controllers have been a fixture in the iPod since its inception, currently supplies Apple with chips for all varieties of the digital music player with the exception of the low-end iPod shuffle.

This news has brought on industry speculation that Apple could launch its first wireless iPods in late 2006 or early 2007.

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23 Comments

melgross

said about 18 years ago

Apple offering its own phone service, like Target, and others do, by getting bandwidth from Sprint, and other companies is a fairly risk free method.

If Apple can get an average of $50 a month from just 1 million customers, not a lot, that would be $600 million a year. If they could sell higher end phones to those customers, that would be worth it as well. Those are conservative numbers. They could easily triple, or more, if the service is good.

The dates for these devices seems about right. Apple doesn't rush into these things. I would be surprised to see anything happen with wireless iPods, or phones before September, at the earliest.

I was dissappointed that Apple didn't buy Portalplayer before they went public. Almost all of their sales are to Apple anyway. Apple could have kept the designs within house. But, they don't like to aquire. I bought their stock as soon as they had their IPO. It went up fast, but when it started to drop, I dropped it.

zunx

said about 18 years ago

Apple, make a wireless iPod capable of booting Mac OS X (lite or whatever) to do the following and we will place an order of thousands for our University:

1. Make a Keynote or PowerPoint presentation on Mac or PC.

2. Save to the wireless iPod.

3. Use the iPod as a wireless remote to do the presentation. No computer involved in the presentation. No cables involved. The wireless iPod sends the vido signal to the video projector on the ceiling via a wireless communication.

Such gadget will revolutionize the presentation world and be a new Trojan horse for Windows and Linux users. The potential halo effect is tremendous in the corporate, education and domestic market.

We just cannot wait!

chris cuilla

said about 18 years ago

Apple's iPhone play could be interesting.

- All products/services have substitutes and compliments. Compliments are the things which if you sold more of A, you'll sell more of B. Think printers and ink cartridges, iTMS songs and iPods, cell phones and air time. Like that.

- One of the theories in marketing/economics is that you want to "commoditize your compliments". "Give away" (at cost or free) the razors to sell more blades. "Give away" (at cost or free) the potatoes to sell more sour cream, chives and bacon bits. Like that.

- With iPod, Apple appears to have tried to "commoditize" the music. They have priced it too low for anyone to make a reasonable profit, but high enough that they cover their costs to run the store and deliver content. They have "commoditized" the music software (iTunes). All to sell more iPods. Some say Apple has reversed things...give away the blades to sell more razors. TiVO is trying to give away the blades (the hardware) to sell more "blades" (the subscription service). Mobile phone companies give away the "razors" (phones) to sell more "blades" (air time, minutes, etc.)

- Supposedly Apple is a hardware company.

I have (in the past) surmised that Apple would take a similar approach with either mobile phones or their "TiVO-killer" as they have with iPod...give away the "blades" to sell more razors...thus:

- Give away free subscriptions to the program/schedule content (unlike what TiVO does) to sell more TiVO-killer boxes. Catch? Only able to access their data feed with an Apple TiVO-killer box.

- Give away (at cost) the air time/minutes for talking to sell more iPhones.

Would Apple take this approach with "iPhone"? Hard to say. Communications bandwidth is in a glut, nearly zero-cost, commodity situation. Perhaps not "air time"...but backbone bandwidth is. There is so much dark fiber laced across this country it is laughable. Not sure that is true with mobile air time capacity.

But...this approach is just the sort of "Apple thing"...change the rules of the game. Turn things upside down. Make black white and white black.

It could be interesting.

ireland

said about 18 years ago

I tell you this is exiting, I have APPL shares.

Though I would be very surprised to see wireless iPods of any type in 2006!
Apple takes one step at a time, one foot in front of the other.

Apple is in the best position it has been in, in years. It's set-up to provide people with the best computers and OS in the world. It's working a broad range computers, and innovations. And it's in the process of building a serious line-up of products. Watch this space! To buy stock now is a very sensible move.

I think even through this transition year apple with outgross last years profits, but I think 2007 will be "the year of apple", regardless of wireless iPods.I do want a wireless iPod though, that would be cool!

melgross

said about 18 years ago

Quote:

Originally posted by Chris Cuilla
Apple's iPhone play could be interesting.

- All products/services have substitutes and compliments. Compliments are the things which if you sold more of A, you'll sell more of B. Think printers and ink cartridges, iTMS songs and iPods, cell phones and air time. Like that.

- One of the theories in marketing/economics is that you want to "commoditize your compliments". "Give away" (at cost or free) the razors to sell more blades. "Give away" (at cost or free) the potatoes to sell more sour cream, chives and bacon bits. Like that.

- With iPod, Apple appears to have tried to "commoditize" the music. They have priced it too low for anyone to make a reasonable profit, but high enough that they cover their costs to run the store and deliver content. They have "commoditized" the music software (iTunes). All to sell more iPods. Some say Apple has reversed things...give away the blades to sell more razors. TiVO is trying to give away the blades (the hardware) to sell more "blades" (the subscription service). Mobile phone companies give away the "razors" (phones) to sell more "blades" (air time, minutes, etc.)

- Supposedly Apple is a hardware company.

I have (in the past) surmised that Apple would take a similar approach with either mobile phones or their "TiVO-killer" as they have with iPod...give away the "blades" to sell more razors...thus:

- Give away free subscriptions to the program/schedule content (unlike what TiVO does) to sell more TiVO-killer boxes. Catch? Only able to access their data feed with an Apple TiVO-killer box.

- Give away (at cost) the air time/minutes for talking to sell more iPhones.

Would Apple take this approach with "iPhone"? Hard to say. Communications bandwidth is in a glut, nearly zero-cost, commodity situation. Perhaps not "air time"...but backbone bandwidth is. There is so much dark fiber laced across this country it is laughable. Not sure that is true with mobile air time capacity.

But...this approach is just the sort of "Apple thing"...change the rules of the game. Turn things upside down. Make black white and white black.

It could be interesting.

I'm not sure they could do that with phone service. Bandwidth isn't the only cost here. Cell companies go the opposite way, subsidizing the phones to sell the service. They all give benefits such as giving free calls within network, etc.

But, they also charge for internet service, data transmitting, WiFi, etc. My daughter has Tv shows for another $10 a month as well.

I think Apple would have to charge for monthly service. They are not shy about that now. They charge for .Mac already. Perhaps this would be another service that could use that as well.

What would make my family switch would be a phone with OS X Lite. If the service was good, this would allow me to give up my Palm phone.

I could see developers of Palm and Windows Mobile software also moving over to this new mobile OS.

With open API's, Apple would pull in a lagre contingent. It would also be Apple's answer to the cell companies music services. I can't imagine Apple selling songs for more than the $.99 they do now, unlike the $2.50 to $3.50 the phone companies seem to want to do. Games could also move over.

In fact, I've spoken to Palm games companies who have told me that if Apple opened the iPod up to them, we would see a lot of games on it.