Apple's Cellular Future

Apple's (Nasdaq: AAPL  ) musical genius is about to hit another platform -- the cell phone. Judging by today's news of its arrangement with Motorola (NYSE: MOT  ) , you could be inserting your earbuds and listening to songs from the iTunes jukebox via cell phone by the first half of 2005.

If you've tuned out Apple's musical mania, then you've probably been living under a rock. The company's recent earnings were a testament to the popularity of the company's iPod, as well as online music site iTunes, which is seen as a catalyst for the iPod devices.

In the companies' press release, it was pointed out that the 1.5 billion cell phone subscribers anticipated to be toting mobile phones by the end of this year represent a large opportunity for Apple's musical ventures. Sure enough, it could be a good way to funnel in users who are not quite ready for the iPod or iPod minis and give them a taste of the lure of music on the go.

And with hands-free laws meaning more and more people will be using earbuds, headsets, and other accoutrements that take the hand out of handset, the more it makes sense that music over cell phones could be a popular service. (It might even make a little more sense than Microsoft's (Nasdaq: MSFT  ) planned media player, with its movie-playing features that may not translate well to portability.)

On the cell phone side of things, many market research firms have forecasted a hot market for musical ring tones. It stands to reason that if such ring tones are a hot commodity with young people, the ability to listen to music via cell phone is almost a shoo-in for success.

It's also yet another sign that cellular handset providers, such as Motorola and archrival Nokia (NYSE: NOK  ) , will have to continually come up with more and more value adds for their offerings, which have become increasingly feature-rich over recent years. Add music to the variety of things you can access on higher-end phones, such as the Web, email, games, and so forth.

As Foolish contributor Tim Beyers recently pointed out, Apple's iTunes, though popular, hasn't really functioned as a revenue generator but rather a way to sell iPods. However, regardless of the hype, it's certain that loads of competitors will soon be having the same idea.

Fools are talking about today's deal between Apple and Motorola on the Apple discussion board.

Alyce Lomaxdoesn't own any of the stocks mentioned in this story.


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