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Roush: Apple itself has an eye on the mobile phone as a music channel.

Roush mentions the Motorola iTunes phone as evidence that Apple has eyes on the phone market. Hooey. Licensing your software to a hardware maker is a lot different than launching a hardware device into an industry with notoriously thin margins and entrenched competition such as the mobile phone industry. I don’t see this happening – at least not until well after established players have flooded the market with music compatible phones.

Roush: All previous forecasts about device convergence have been wrong.

Unfortunately, I’d have a hard time arguing this point.

Roush: There’s no good way to download music to a cell phone.

I disagree, but with a caveat. If the major carriers insist on forcing consumers to download their music over their networks – which makes sense for the carriers since data traffic is a revenue generator – then yes, carrier-introduced music phones will be at a severe disadvantage and the issue could make the devices a non-starter.

Until the existing cellular networks in the United States get faster, people won’t want to download music files on balky cellular networks – especially not if they’re billed by the minute.

That said, it’s clear that vendors such as Motorola are aiming to please the consumer, not the carrier. Motorola’s iTunes-enabled phone will allow consumers to load songs directly from their computers, bypassing the need to download the songs again.

Roush: Volume doesn’t mean much.

“The #1 reason advanced by journalists for the iPod’s imminent demise,” Roush writes, “is that cell phones far outnumber iPods…So what?”

I’m afraid I don’t understand the point here. He writes that Apple has succeeded as a niche player in the computer market. But right now, the nascent digital music player market is all about volume and market share, and Apple dominates that.

The primary reason why Apple’s stock has been on fire of late is the profits the company is making from its iPods and the perceived growth that lies ahead for the segment. If iPod volume diminishes as a result of more people buying music-enhanced cell phones – which I believe it will – then Apple again will face investor scorn and will slowly shrink back to being little more than a small computer maker with cool-looking products.

This change is not going to happen overnight. Though the iPod’s success since 2003 has been pretty meteoric, the digital music player market existed for five years before the iPod launched. Given the above examples of consumer willingness to accept seemingly deal-breaking tradeoffs to add features to their cell phones, I think it’s unwise to bet against the eventual rise of music-enabled cell phones. And given peoples’ preference to carry as few devices as possible, I think that growth will be at the expense of the iPod.

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