The (impending) iPod Phone?

Or is it an iTunes Phone?

There has been so much written on this subject in recent weeks (not to mention countless articles going back almost a year since this was first mooted), that I'm not sure I can add anything insightful. And, as usual, I'm going into guess mode 2 days ahead of the announcement just to allow myself to be embarrassed after the true facts emerge. On 7th September, we'll all know.

So what are the issues here, and why has all this taken so long?

The heading and first line actually are quite important, and I'm not sure we know enough yet to say which it's going to be (or is it both?). For instance, it is possible that the device is really more iPod - you would need a computer running iTunes to manage the library (and presumably the downloads) to do anything. You would sync the phone with the computer, much like another iPod to transfer music. This would presumably be the easier choice to implement for Apple. There would be no DRM issues as long as Apple was able to count the phone as another iPod in it's agreements with the music industry. iTunes already supports multiple devices, so no real change there.

But, another possibility is that the phone will actually have the capability to manage it's own library too - in other words have some of the iTunes interface on the phone itself. Yes, you could synchronise it with your main library of music. But you could also manage music directly on the phone doing a few things the iPod cannot do today (eg playlist management). This is much harder to do, but if the phone allowed you to purchase music directly from the iTMS, then it might be a lot more attractive to the carriers for instance - they could get the data usage they so crave (if not the content revenues). We've seen rumours of Cingular (US), T-Mobile (Germany) and O2 (UK) as being on-board. This is a big change from a few months ago, when it seemed that Apple/Motorola couldn't get any carriers behind it. So, perhaps some of the delay has been about re-engineering the software to allow some more features to create a business model that Apple + Motorola + Carrier can be happy with.

Now, I also think the climate has changed a bit. Carriers have got more realistic. They thought they could do music on a $2-3 a download model like ringtones, and via their own store. They realise that the consumer is not going to go for this model. They've also seen that Sony Ericcson has introduced the Walkman phone, so this already gets around much of that business model they so craved. Given the new realism, I think they've decided to join the iTunes party rather than stay outside it. They will get either something from the download data usage, or they will get a cut of the iTMS revenue (though not very much). Or a bit of both. Those that are first will get the publicity.

For the consumer, there are attractions as well. Remember that to have an iPod today means you have to have a computer. There are still many people who don't have a computer but who would like this functionality. Or, some who just want a simple device - plug and go, no sync etc. A phone that can get it's music without connecting to the computer might be attractive for reaching a new market especially with holiday season on its way. (Now there are still problems with this model not least how to protect/backup what you own, and also how to interface your own music - which is responsible for 95%+ of music on most iPod's today. I won't deal with these issues, though they are important. I hope the announcement will). For those already with a computer (and perhaps an iPod), there are no downsides to this model unless it has extra DRM restrictions. Some extra iTunes features on the phone (eg download free podcasts) might make it attractive as a device in addition to your iPod. In fact, when I think of these sorts of features, I get quite excited!

So, I suspect the delay has been a bit about companies' expectations maturing, and also about developing the software that makes this a hit. If the companies together can come up with a compelling offering that mobile + iPod is MORE than the sum of the parts, then that sounds like something Apple would be behind.

Now, I also think the announcement this week - the invitations to which have made it seem as important as the original iPod announcement - will herald a FEW things. If it was just one Motorola phone which could act as an iPod and had a 25 song limit (see usual rumour sites), I think we'd be rightly underwhelmed (and would never read an invitation like that the same again). So, that's why there has to be a lot more to come out.

So let's make some wild guesses about other possibilities:
1. The 25 song limit. There is no way this phone will just do 25 songs. It may do in it's default shipping configuration. But there will be a way to have storage equivalent to iPod Shuffle devices. It might involve unlocking the phone with an iTMS account perhaps for free, for a minimum number of downloads, or for a one-off fee. A 25 song iPod is not what this announcement is about (hint: "1000 songs in your pocket changed everything; here we go again" does not indicate a 25 song phone!)
The 25 song limit (if it exists) will be to allow people to trial the music features - a lite version if you like. Remember also that Apple doesn't really make money on the iTMS - it's a device to sell iPods. So, whatever model comes out is probably going to require Apple to get money in some way other than just via iTMS purchases (which it might have to share with the carriers). Perhaps the Apple tax will be included in the phones purchase price, but maybe not?

2. Video iPod. This seems a long shot still. I think no one can agree what this device should be yet, except for something which appeals to a minority of people. Sure, the technology exists, but Apple wants the demand to be there before releasing something that wow's everyone. In favour of this rumour though is that the current fullsize iPod itself is now the oldest device in the range. Something new for the holiday season would be very welcome. Perhaps it will be in the form of bigger screens, capacity limit raised to 80GB and so on. Or perhaps some better features for playing music in the home (eg bluetooth connection to hifi or dock-to airport feature). I already find I use my computer to play music in the home, with my original iPod marginalised. More features in this regard would ensure the bigger iPod becomes THE device for music again.

3. Solid-state iPod mini. I wouldn't have believed this a few weeks ago. But I think that the rumours of Samsung's offer to Apple are very interesting. People love the Shuffle (it's size/weight etc - perfect for the gym). But it is a second iPod for many people. The lack of the screen was a clever ploy by Apple to test the market, while pricing it such that it could not be a failure. If they can get the price right, and make the iPod mini a smaller device with better battery life and a colour screen - albeit small, then I think they will do this as soon as they can (preferably before the holiday season).

The fact that Apple and Motorola have separate announcements leads me to believe that Apple's announcement will be more than about the iPod Phone, so expect something on 2 or 3 above, maybe both (though not 2 completely new devices).

Finally, I'm going to be VERY interested in the interface issues. It has been written about many times before, but merging an iPod and a mobile is not as simple as it sounds. For instance, current music phones (that I am aware of) must be paused just to read or compose a text message. That limitation must be removed. I'm also intrigued whether Apple can get the iPod scroll wheel implemented in a phone. This is still perhaps THE feature which defines an iPod (at least those with a display). I can get my Nokia phone to play music files well, but it is not something I do, because it is non-trivial. Sure, for 25 songs, we don't need a scrollwheel. But I've covered that topic above! Navigation and multi-tasking will be quite important for long-term acceptance.

Anyone else want to stick their neck on the block?