Report: Apple Tells Manufacturer To Build 'iPhone'

Commercial Times

But what will the device look like?

Nick Holland, a senior analyst at Pyramid Research, said Friday that he doesn't expect to see any major surprises in the device, which he figures will likely track the latest technology available today. "I expect it will be an iPod primarily," he said. "And you'll also be able to call someone."

Holland said he has no inside information on Apple's closely-guarded plans, but it's clear the firm has learned from its experience with the Motorola ROKR phone linked with Apple's iTunes music downloading site. "The ROKR holds just 100 songs," he said. "That's not enough." The ROKR hasn't been enthusiastically promoted by Apple in recent months, he noted.

Holland says a combo cell phone/music player should be able to play 600 to 700 songs, meaning that a successful device should have memory of at least 5 Gbytes. Handsets with 10 Gbytes of flash memory have been introduced in Korea recently.

"I expect Apple to follow the general trend against the Swiss Army knife approach" of having many different functions in a single device, Holland said. He looks for a "dual function device" -- perhaps one phone and music player and another smartphone device for data.

He added that Apple will have to walk a fine line with service providers, who are increasingly offering their own music to cell phone users. "Downloadable music is becoming a big earner for telcos," Holland said. "And I can't imagine Apple would let go of its hold over iTunes. So they have to work this out."

The entire cell phone/music player business is getting more competitive with the passage of time, Holland said, noting that "Walkman branded" Sony-Ericsson phones with flash memory have made a strong showing in the mobile phone/music player market.

The Commercial Times said its source reported that Apple planned to introduce its cell phone during the first half of 2007. Hon Hai Precision -- its trade name is Foxconn -- has been a longtime contractor for Apple.

Neither Apple nor Hon Hai would comment on the reports.