Apple iPhone could take a bite out of Motorola profits

Apple Computer plans to introduce its own branded multimedia cellphone, which could put a dent in Motorola's profits, according to a Barron's Online story.

As the U.S. handset leader, Motorola may be vulnerable to any new handset trend, Ken Leon, a Standard & Poor's Equity analyst, wrote in a research note sent to clients on Monday. However, Leon said he believes Motorola is ready to ship in volume its own innovative products "soon."

"We think Motorola's PBL, SLVR and Q products, along with the RAZR, will boost 2nd half [2006] sales," the analyst told investors.

Leon sees a new, more robust Motorola SLVR handset that can hold more than 500 songs as being the company's answer to any such Apple iPhone.

Recently, several Wall Street analysts have made comments that suggest an Apple-branded cell phone may soon become a reality.

In one report, released last week, analysts for PiperJaffray said they believe there is a "75 percent chance" that Apple will debut an iPhone product within the next 12 months.

According to the report in Barron's, which is causing much of today's iPhone hoopla, Apple is said to be in talks with Tiawanese-based Hon Hai over a contract that would allow it to help produce the phone.

Also known by its US trade name, Foxconn, Hon Hai is one of Apple's largest manufacturing partners, whose resume includes production services on the PowerMac G5, Mac mini, iPod and AirPort Express, among other products.

The Apple-branded phone would make a debut in the fourth quarter of the year, according to the report.