Is Apple's all-singing phone out of date already?

The company has unveiled a Rokr to take on the music player mods. But, as Ben Schneiders finds, it is in danger of being left behind by its rivals
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The Independent Online

While Mr Jobs fiddled with the talk and music functions at last week's launch of the Rokr phone - a collaboration between Apple and Motorola - industry analysts gave a cool response. "We have not had a chance to test this product, but it looks like a lemon thanks to a string of bad decisions," said an Ovum research report of the new mobile, which also includes a camera, video and internet access. "It has been roundly panned on a large number of sites and is now likely to struggle in the market," the report added.

Mr Jobs described the device, which allows songs to be transferred to mobiles from an iTunes jukebox on a Mac or PC, as an iPod Shuffle for your phone.

However, Ovum senior analyst Dario Betti told The Independent on Sunday that he was not convinced by its design and said the product was less adventurous than expected. "It could have been one of the first of its kind, but right now it's a generic-model phone with lots of features."

One enhanced function is the number of songs it can store, which at around 100 is similar to the capability of the Sony Ericsson Walkman W800 but far less than the soon-to-be-released Nokia N91. "Music to the mobile is nothing new," says Mr Betti, pointing out that most new models can store some songs, although less than the Rokr. He reckons the decision to team up with Motorola and launch the phone is a defensive move.

"Apple has a good dose of healthy paranoia. It knows very well the feeling of inventing a market and then someone coming along and stealing it," he says, referring to the company's early dominance of the personal computer market. He adds that the new phone is being used to protect the iPod from mobile phone-based devices such as the Nokia N91 and the Sony Ericsson Walkman W800.

Apple's desire to support its music player was also highlighted last week by the launch of an even smaller iPod, the nano, which is about a third of the size of the iPod mini, its most popular device. For although Apple's range of music players leads the way in a market that almost doubled in size in the first half of this year, it has a fight on its hands to maintain its pre-eminence. Analysts may have doubts over both the design and quality of the Rokr, but the rationale for Apple's move into mobile phones is easy enough to see.

While companies such as Sony Ericsson and Nokia are including a music capability in their products to compete with the likes of the iPod, they have added functions such as the internet, radio, video, a digital camera, mobile TV and gaming.

The great hope is that consumers will flock to these new multi-use machines and in the process change the face of the consumer electronics industry - in much the same way as the iPod did.

The success of Apple's music player has affected demand for small home stereos, portable CD players and car stereos, analysts say. The hope with these new phone-based devices is that instead of consumers buying a series of products from stereos, to phones, to navigation systems, to personal organisers, they will only need one.

"It's not any more a mobile phone, its not an advanced mobile player - it's a new category," says Pekka Rantala, Nokia's senior vice president of marketing and multimedia, of the new range of devices. "We call them multi-media devices - they are small, portable multimedia computers."

Nokia, the biggest worldwide player in mobiles, now wants to stake a claim in this new category and is rolling out three new products over the rest of the year, as part of its Nseries launch.

The attraction of this all-in-one approach lies in the huge number of people with mobiles, compared to other consumer products. "Ninety per cent of adults have bought into these devices," says Paul Jackson, principal analyst at research group Forrester. "People tend to replace them every 18 months to two years, whether it's through loss, breakage, theft or the contract expiring," he adds.

The mobile phone market is massive, with 700 million models sold around the world every year. Even if the new multi-use devices don't sweep all before them, the potential demand is still sizeable. In three to four years, says Mr Betti at Ovum, the market for these all-singing, all-dancing phones could account for 5 to 10 per cent of all mobile sales. While that doesn't sound a lot, this translates into sales of at least 30 million a year.

While Apple has not been met with wild applause in its attempts to tap into this potential with the Rokr, the reception from industry watchers for its rivals has been more positive. "Sony is a very sexy phone with a nice brand," says Mr Betti of the Walkman W800.

Nokia's new products are regarded as being more technologically advanced, but they are likely to cost as much as $800 (around £435) - more than three times the price of the Rokr.

However, the Nokia N91's ability to store as many as 3,000 songs gives it an advantage over its rivals and makes it more of a direct competitor to the iPod. "It's a bit more aggressive - they are pushing the boundaries with the technology," says Mr Betti. "It's a very robust phone. It doesn't look as sexy as the iPod - the size is very chunky - but it will be the first one of many with Nokia and you tend to judge them on what comes later."

While industry observers suggest that these products may have stolen a march on the Rokr, not everyone is convinced about how successful the new generation of devices will be. "We thought a few years ago that everybody would narrow down to single devices," says Rob Bamforth principal analyst at technology research firm Quocirca. Although these products sound compelling with all the added functions, he adds, often they just confuse the consumer. "Ultimately it's about usability."

Of all the added functions, songs look best suited to the new-generation devices. "Music seems the most compelling of these offerings," says Mr Bamforth, as it is a medium suited to being portable - unlike mobile TV or the internet.

Rachel Lashford, an analyst at researcher Canalys, agrees: "Music-centric phones will clearly have some impact on the portable music player market - a fact acknowledged by Apple dipping a toe in the water through the Motorola collaboration."

But she doesn't expect mobile phone players to offer much to a high-volume music lover: "The convenience of having to carry one device less will usually be outweighed by the design compromises that result."

While some doubts persist about the future of these new multi-use devices, Apple will be hoping that its rivals don't move too far ahead. If they do, its iPod range could suffer the same fate that its PCs did in the 1990s.