Apple's (Nasdaq: AAPL) 
new iPhone ringtone making option, which is built into iTunes 7.4.1, is astoundingly cool and yet annoying at the same time.
First, the cool.
It's cool because it's so easy to create a custom ringtone. Cell phone users who have previously balked at paying something like US$3 for the latest radio hit ringtone -- if they could even figure out how to find, download and install it on their phones -- can now make their own iPhone ringtones out of their favorite "eligible" songs for $1.98. Apple's ringtone-making process comes with a few head-scratching moments, but most consumers should be able to figure it out.
Even so, a few tips can save you 20 minutes of stumbling around.
Update iTunes First
To use Apple's ringtone maker, you need to make sure you're running the latest version of iTunes, so if you haven't gotten that update out of the way, you'll want to do it. That is, unless you're using third-party software like iToner or iPhoneRingtoneMaker, which work around iPhone restrictions to let you use most any digital song or audio clip as a ringtone. By updating iTunes, you'll break your third-party ringtone workarounds because Apple actively works to seal any loopholes. The third-party ringtone makers have so far been able to issue updates of their own to get around Apple's blocks, but there's no guarantee the next iPhone update won't completely break a third-party solution.
Apple certainly wants to sell ringtones, but the company may also find itself in a bind over copyright restrictions and agreements with record labels that may require licensing and control over the usage of ringtones.
Find the Bells
After you've updated iTunes, the trick is to find the ringtone "bell" icons. While in iTunes or the iTunes store -- in any screen which has a list of songs with columns that show the title, artist, album, etc. -- you can right-click and choose to display "Ringtone." If your mouse doesn't support right-clicking, go to the View menu, select View Options, and make sure the Ringtone checkbox is marked.
At this point, iTunes will ask you if it can scan your music library to tell you which songs are eligible for ringtones. After the scan, you'll most likely get a disappointingly small list of songs that are eligible for ringtones. Songs that you ripped from an audio CD into iTunes won't show up as eligible -- only songs that you have purchased from iTunes. Even then, there's a great chance that many of them will be missing the tantalizing bell icon.
Don't Despair Yet
If your favorite song doesn't have a bell associated with it, go to the iTunes Store and search for the song there. There's a decent chance you'll find it, but not having your favorite songs eligible for ringtones is the single most irritating and disappointing thing about Apple's ringtone offering. To be fair, it's not necessarily Apple's fault. Record labels and recording artists sometimes sign exclusive deals with other online outlets that could bar a company like Apple from offering a ringtone. There are a lot of behind-the-scenes legal deals in the industry to which none of us are ever privy. Apple initially launched its ringtone offering with 500,000 eligible songs, but the company said it would continuously add more.
In any event, if the song has a bell icon next to it in the iTunes Store, you can buy the song for $.99 and then convert it into a ringtone for another $.99 -- hence the $1.98 total ringtone price. It's a two-step process unless you previously bought the eligible song from iTunes.
Making the Ringtone
Once you've got a ringtone-eligible song in your music library -- make sure you've signed out of the iTunes Store -- simply double-click on the ringtone bell icon next to the song you want to convert to a ringtone.
iTunes will then ask you to sign in with your account password, and it might then ask you to do it again in a second step for the ringtone. Plus, Apple may ask you to review the iTunes Terms of Service document and agree to whatever changes they slipped in. It's odd for Apple to be this clumsy, but again, it most certainly has something to do with copyright and licensing agreements between Apple and record labels.
After going through this process, you have to go back to the song with the ringtone bell icon and double-click the bell again. This time, the ringtone maker will rise from the bottom portion of iTunes. It's a couple of inches high and as wide as your primary iTunes window. You'll see an audio waveform of the song and a 15-second long portion preselected in a "blue" section. Clicking and holding on this blue area will let you move it around the song. By clicking a Preview button, the selected portion will play for you, looping itself automatically with a half-second gap between loops. To increase or decrease the amount of song you want to snip into a ringtone, simply click and hold the sides of the blue selection edge and drag them longer or shorter. Your maximum is 30 seconds.
You can change the fade in and fade out of the ringtone, and once you're happy with the results, click "Buy" to purchase the ringtone, which will cost $.99.
Onto the iPhone
The ringtone will appear in a special ringtone folder in your iTunes Library. From that list, you can confirm that you've got the ringtone. Your next step is to sync your iPhone to iTunes, which will import the ringtone to your iPhone -- assuming that you choose to import the ringtones.
Once synced, your new ringtone will appear as an option in the iPhone's ringtone list. You can set all incoming calls to use the ringtone or assign the ringtone to specific contacts. I personally set the alarm on my iPhone to use my custom Matchbox Twenty "3 a.m." ringtone to wake me up this morning at 5 a.m. Worked great.
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