Apple unveils iPod-mobile phone, even smaller iPod

SAN FRANCISCO/NEW YORK (Reuters) - Apple Computer on Wednesday unveiled a mobile phone that plays music like an iPod and a pencil-thin "iPod Nano" digital music player, both aimed at extending its domination of the digital music market.

The Rokr phone, developed with Motorola, can store up to 100 songs and has a colour screen, stereo speakers, stereo headphones and a camera and is Apple's long-awaited foray into the wireless realm. Cingular will be the first mobile carrier for the Rokr. Several operators in the United Kingdom are expected to offer the phone soon.

In addition to the Rokr phone and the seriously slimmed-down new iPod, Apple Chief Executive Steve Jobs also said that in 2006, some 30 percent of all new US cars will sport stereos that can easily connect to the iPod.

But some said the silver phone was not stylish enough for the high expectations set by Apple's iPod and Motorola's slim flagship Razr phone, and others cited its somewhat limited song capacity since iPod users are accustomed to carrying thousands of songs.

"It doesn't have the emotive cachet that the Razr or the iPod has," said Yankee Group analyst John Jackson. "When you whip this out in the bar, nobody's going to say, 'That's a cool device.'"

The Nano, which is about a quarter of an inch thick by 3.5 inches (8.9 cm) long by 1.6 inches (4.06 cm) wide, generated more buzz at the product release in San Francisco than did the Rokr phone, eliciting "Oohs" and "Ahhs" from the audience.

The black and white players, sporting click wheels, holds up to 1000 songs. Apple has about 75 percent of the market for digital music players.

"It's very important for Apple," said Gartner analyst Van Baker, about the Nano. "It changes the rules of the game."

Meanwhile, the Rokr iTunes phone will be available in Cingular stores on Thursday.

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

Cingular does not make money from the songs played on the phones, but hopes they will help boost sales and reduce customer defections to rival services. One analyst said it could become Cingular's top-selling phone by next year.

"If this phone is easy to use, at this price I think it will fly off the shelves," Charter Equity analyst Ed Snyder said. "Cingular will reap the benefits of the combination of Motorola and Apple's brands."

The phone does not allow for wireless downloads, but it does eliminate the need for carrying two separate gadgets.

Motorola said the phone would be available in the United Kingdom at Carphone Warehouse Group's stores in mid-September and with operators such as O2, Orange, BT Mobile, Virgin Mobile this month or next.

In the coming months, it is also expected to be available in countries such as Germany, Canada, Italy and France.

Motorola's chief marketing officer Geoffrey Frost said the phone -- the first in a whole family of Rokr devices -- would be followed by more stylish designs.

"As this continues to develop you'll see it become as iconic as our other new products," Frost said, referring to a new products inspired by its Razr phone.

Music is expected to be one of the hottest new features in mobile phones, which already sport everything from cameras to video players.

Apple, which has remade the music industry with a 75 percent share of the digital music player market, has to keep up a steady pace of innovative new music products to maintain the level of growth investors now expect.

Apple said it was teaming with carmakers Acura, Audi, Honda and Volkswagen to integrate its iPod products into their car stereos for 2006 model lines.

Apple, which has sold more than 21 million iPods since introducing them in 2001, keeps new products under tight wraps before unveiling them at carefully staged events.

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