Will Apple make a true iPod-mobile phone?

With the help of Motorola, Apple CEO Steve Jobs finally made good last week on his pledge to deliver a mobile phone that plays music like an iPod, Apple's wildly successful digital music player.

Even so, many expect Apple to go further.

Ultimately, Apple may introduce its own mobile phone-iPod combination, dubbed the "iPhone", designed by Apple itself from the ground up and which would most likely be made by a contract electronics manufacturer such as Flextronics.

But don't expect it in the next year or so, analysts said, noting that Apple, based in Cupertino, California, has a number of hurdles to overcome. Among them: partnering with a wireless-service carrier to resell minutes on its network and choosing a contract handset maker to produce the devices, which must work with the different mobile transmission standards.

Tim Bajarin, an analyst at market research firm Creative Strategies, said: "Given [that] Apple just did this with Motorola and Cingular, I can't see anything short-term. They have to let this thing play out and see if the Motorola phone can be successful on its own."

Last week in San Francisco, Apple announced the Rokr phone, which is made by Motorola and was the company's long-awaited foray into the wireless realm. Reaction to the phone was muted and overshadowed by Apple's introduction of a sleek, smaller replacement to the iPod Mini, called iPod Nano.

Number one US mobile-service provider Cingular Wireless, a venture of BellSouth and SBC Communications, will be the exclusive US carrier of the phone, which it will sell for $249.99 to customers who sign up for a two-year service contract.

Speculation has centred on a device that looks more like one of Apple's signature white iPods rather than a traditional mobile phone. The iPhone might include Apple's well-known "click wheel" to navigate through the phone's functions and would also include a pop-out keyboard.

It would also be a true iPod, one that could hold thousands of songs and photographs, compared with the 100 songs that the Rokr phone can store, analysts said.

In a recent research report, Piper Jaffray analyst Gene Munster wrote that a survey of 200 people, which his firm conducted, showed an 18 per cent interest in an Apple-branded phone with iPod capabilities.

It is an enticing market: More than 750 million mobile phones are expected to be sold worldwide this year, compared with an IDC forecast of 57 million digital music players sold in the same period. Apple has about a 75 per cent market share of the global digital music player market.

If Apple were to design its own phone and partner with a contract electronics manufacturer, which it could then sell to its own network of retail stores, it would need to set up what is known as a mobile virtual network operator, or MVNO.

An MVNO such as Virgin Mobile USA typically does not have its own network. It purchases minutes from traditional carriers and resells them to its own customers.

Munster said that while there may be sufficient interest for an iPhone, he also noted potential obstacles.

He wrote: "Apple would need to strike deals with carriers on how to share the economics of consumers downloading content. Apple would also have to design its products for carriers' differing network technologies."

For its part, Apple said last week that it retained flexibility in the deal it struck with Motorola. As it tests the market for music on mobile phones, Apple is free to work with other handset makers and cellular providers, according to Phil Schiller, Apple's head of worldwide product marketing.

Schiller said: "We have flexibility to do many things."

So, perhaps consumers can expect more Rokr-like phones from the likes of Nokia, Samsung and others down the road.

But perhaps the most titillating indication of Apple's intentions is a website, iPhone.org. A visit to that website brings a visitor to Apple's own home page, and the site itself is registered to Apple.