Motorola Delays iTunes Phone, Plans More Models

In an unexpected announcement today, Motorola (NYSE: MOT) postponed the unveiling of its first iTunes phone and then said it is working on several additional iTunes compatible models for future release.

Motorola's first iTunes phone, the E790, was scheduled for introduction today at CeBIT, the world's biggest electronics fair, in Hannover, Germany. The iTunes model had been planned for a summer release in Europe, but the company said it has decided to delay the launch indefinitely after what it will only call "discussion" with operators.

"We are in talks with operators but until we have more details we are holding off on the launch," Motorola said. Company executives have not yet disclosed when the E790 will finally be unveiled, but industry watchers have suggested that details of the agreements between Motorola and carriers of the iTunes phone service need to be ironed out before that happens. Motorola representatives did not return calls for comment.

Jockeying for Position

Meanwhile, Motorola's ROKR, another iTunes-compatibile mobile phone model, is said to be on deck for unveiling later this month at an industry event in Florida. The company has not confirmed plans for the release of ROKR.

To some extent, the delay puts Motorola behind the curve, with rival Sony (NYSE: SNE) Ericsson (Nasdaq: ERICY) having demonstrated its first phone with a built-in Sony Walkman last week. Sony's phone is scheduled for mass market release later this summer.

Nokia has also hopped on the digital music bandwagon, announcing it would use Microsoft's (Nasdaq: MSFT) music technology to introduce a dedicated music phone in the future.

Motorola said it is working on several additional iTunes-compatible mobile phones, some of which would be capable of storing up to eight hours of music.

"Over the course of the year, you'll see more [iTunes] devices," Motorola's Alberto Moriondo said at CeBIT. "The Walkman for the 21st century is the Apple (Nasdaq: AAPL) brand."

Mobile Music Market

Clearly, there is significant investment going into MP3-compatible phones, but the question remains as to whether John Q. Public will shell out his hard earned dollars to purchase the next-generation model in the evolution of cell phones.

"It's hard to say whether or not there is a huge market for MP3-compatible phones," IDC mobile devices analyst David Linsalata told MacNewsWorld. "This is a new step for mobile phone manufacturers and music providers as well."

But, he added, if you look at the success of MP3 players and then consider the fact that people almost always have their mobile phone with them, then the results seems to bode well for MP3-compatible mobile phones.

What is certain is that Motorola has a market advantage thanks to its partnership with Apple, according to Linsalata. "Apple is a cultural icon," he said. "Having a phone that is very clearly associated with such a hot consumer electronics product is very beneficial."