To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://networks.silicon.com/mobile/0,39024665,39165040,00.htm

Apple iPhone would struggle, says Microsoft
'We thought of it too!'

By Reuters

Published: Tuesday 09 January 2007

Apple faces some tough hurdles if it decides to launch a mobile phone built around its popular iPod music player, Microsoft's entertainment chief has said.

Robbie Bach, president of Redmond's entertainment and devices division, said it too is considering a mobile phone integrated with its Zune digital music player but launching such a device is not at the top of its priority list.

Microsoft launched the Zune in November and set a sales target of more than one million units by the end of June. It is the first Microsoft-designed device in a market dominated by Apple, which has sold more than 70 million iPods since it was launched in October 2001.

Apple's long-time rival plans to come out with new Zune models later this year but Bach said do not count on a phone model just yet.

Speaking to analysts at the Consumer Electronics Show in Las Vegas, he said: "It's probably on the table of things for us to look at but not the number one thing we are focused on."

Many Apple watchers are expecting Apple CEO Steve Jobs to announce an iPod phone today at Macworld in San Francisco. Analysts estimate such a phone could sell for $200 to $400, depending on its configuration.

Analysts have said Apple may sell the phone with its own branded mobile phone service via a mobile virtual network operator (MVNO), under which Apple leases excess capacity from other carriers.

Or, they have said, Apple might instead sell the phone "unlocked", in which case buyers could choose the mobile phone service provider they want to use.

Bach, who oversees the Zune business and Microsoft's video game division, said: "The latest rumour we hear is that it is going to be an MVNO phone and there hasn't been a lot of successes in that MVNO space for a lot of different reasons."

Bach said MVNO phones often have difficult relationships with the mobile operators. One of the few successful MVNOs in the US so far is Virgin Mobile. "Historically, working with partners hasn't been a strong point for Apple, so maybe it will find a way to work around those relationships," he said.

An Apple representative said the company does not comment on speculation.

Putting together a phone with a media player raises many design questions, including how to manage various inputs, the optimal screen size and battery life, Bach said.

He added: "You have to find out what it's great at. Is it great as a phone or is it great as music player? If it's great as a music player, then it's just another iPod trying to be a phone."