More Music to Your Ears?

Most of us are already aware that a tie-in to Apple's (Nasdaq: AAPL  ) iTunes just wasn't enough to boost demand for Motorola's (NYSE: MOT  ) ROKR phone. Now, the company is releasing souped-up phones with a new iRadio service, in the hopes of attracting music lovers where its first ROKR failed.

It seems like the new ROKR won't offer its predecessor's iTunes software. Instead, Motorola will offer a subscription-based music service called iRadio, offering 435 ad-free radio stations, for $7 per month. It's a clear competitor for Motley Fool Rule Breakers pick XM Satellite Radio (Nasdaq: XMSR  ) and its rival Sirius Satellite Radio (Nasdaq: SIRI  ) .

Motorola's first iRadio-compatible phone will hold about 70 hours worth of music (a major improvement over the much-scorned puny memory capacity on the original ROKR).

The major cell phone providers have all seen potential dollar signs in the Apple-led trend toward mobile, downloadable music. And of course, traditional radio has fallen short for many people, which opened up a market for satellite radio companies to come in and offer the diverse content that consumers crave without the intrusive, annoying commercials.

In keeping with that idea, we've seen many similar services from the cell phone providers, such as recent musical offerings from Sprint-Nextel (NYSE: S  ) .

Cellular providers' efforts to compare their phones to the iPod are hardly surprising. Cell phones' status as a must-have gadget for many people might be one reason the phone companies feel they have an edge against the iPod's popularity. But so far, musical offerings have been rough going for them. It's tough to compete against the iPod, and their missteps have included high-priced song downloads and the sheer entrenchment of the iPod at present.

It wouldn't be hard to imagine Motorola's newest musical initiative falling flat. If an Apple tie-in didn't help the first version of the ROKR to become a huge hit, how will its iRadio-enabled successor fare against Apple, XM, and Sirius alike? (I drew similar concusions about rival mobile phone services' musical offerings.) Despite cell phones' presence in so many pockets and pocketbooks, I don't see a sufficiently compelling reason for many people to choose phone-based services over iPods and sat-rad.

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Alyce Lomax does not own shares of any of the companies mentioned.