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Rokr Flop
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Posted by: CA

Motorola's ITunes Phone May Flop as Handset-Return Rates Soar

Oct. 21 (Bloomberg) -- Motorola Inc.'s iTunes music phone, developed with Apple Computer Inc. and unveiled last month in front of an audience of more than 500, may have flopped.

As many as six times more customers are returning the Rokr phones than is normal for new handsets, according to American Technology Research analyst Albert Lin, who said he talked to distributors, retailers and call center workers at Cingular Wireless LLC, which sells the phone.

Motorola Chief Executive Officer Ed Zander said he is disappointed with the phone's marketing and plans to fix it.

``We got off to a little bit of a rough start,'' Zander said in an interview after Motorola reported on Oct. 18 that third- quarter profit tripled, driven by more-popular phones such as the Razr. ``People were looking for an iPod and that's not what it is. We may have missed the marketing message there.''

Zander said the Schaumburg, Illinois-based company didn't make it clear enough that the Rokr stores fewer songs than an iPod. The phone holds 100 songs and costs $249.99 with a two-year contract from Cingular. The iPod Nano, introduced the same day, holds 1,000 songs and costs about the same.

The response to the phone blemished an otherwise better-than- expected earnings report from Motorola, the world's No. 2 mobile- phone maker.

``There's an overall disappointment with the product,'' said Lin, based in San Francisco. He rates Motorola shares ``buy'' and said he doesn't own the stock.

`Compatibility Bugs'

Apple CEO Steve Jobs unveiled the phone Sept. 7 from the stage of the Moscone Center in San Francisco after 15 months in development. Pop singer Madonna joined in the introduction via telecast from London.

Madonna is also featured in a television ad for the Rokr. She's crammed into a phone booth with musicians such as Little Richard and an actor portraying Beethoven. She shouts ``Biggie! No!'' when the late rapper Notorious B.I.G. approaches the booth. As the commercial ends, a voice-over intones, ``A hundred tunes in your phone, baby.''

Apple, on its Web site, advertises that the firm's iTunes software can link to the phone. The program has ``compatibility bugs,'' Lin said.

On the Cupertino, California-based company's online discussion boards about the Rokr, the longest discussion among more than 70 topics concerned how to synchronize the Rokr with an existing iTunes account on a personal computer.

Less Inspiring?

Motorola sold 250,000 iTunes phones in the weeks it was on sale last quarter, or about 83,000 a week. About 6.5 million Razr phones were sold during the entire quarter, or about 500,000 a week. Lin said Rokr's sales matched estimates, though the high rate of customers returning the phone means it won't be a ``superstar product.''

``The Rokr is performing equal or better to any product launch and I don't have anything that would corroborate'' higher returns, said Alan Buddendeck, a Motorola spokesman.

Mark Siegel, a spokesman for Cingular, the biggest U.S. mobile-phone service provider and the only U.S. carrier sells the iTunes model, said the company is ``satisfied with the results of the sales.'' Apple spokesman Steve Dowling declined to comment.

``There's a difference in the marketplace around the world,'' Buddendeck said. ``The U.S. is very familiar with the iPod and the reviewing audience was unfairly comparing it to the iPod.'' Zander said the Rokr phones are selling better in Europe and Asia.

Pink Razr Coming

The iTunes phone failed to inspire buyers in the same way as the Razr, Motorola's previous new product, analysts said. The company has sold 12 million Razrs since the introduction last year. The phone accounted for 17 percent of its 38.7 million handsets sold last quarter, Ron Garriques, president of Motorola's mobile-devices unit, said in an interview.

Demand for Razr helped Motorola's net income jump to $1.75 billion, or 69 cents a share. Revenue rose 26 percent to $9.42 billion, beating analysts' estimates.

Zander this year added an all-black Razr. Former Wimbledon champion Maria Sharapova, who endorses Motorola, requested an all- pink version for herself. Zander, 58, plans to sell a similar version to consumers by the end of the year.

Motorola shares fell 17 cents to $20.72 at 12:50 p.m. in New York Stock Exchange composite trading. Apple dropped 38 cents to $55.76 on the Nasdaq Stock Market. Cingular, based in Atlanta, is owned by SBC Communications Inc. and BellSouth Corp.

`Small Subset'

The iTunes phone is only one of Motorola's music-focused phones, Zander said. The company next year will roll out a new service dubbed iRadio that will allow subscribers to wirelessly transfer music from a home entertainment system to a cell phone or a car stereo.

``ITunes is a small subset of Motorola's music strategy,'' Lin said. ``As far as their financial focus, they're much more interested in other devices, and by the end of the year, it's iRadio that's going to be front and center.''

Apple has sold more than 600 million songs through its iTunes store and more than 10 million users have iTunes accounts. That's still a big target market, Zander said. Some analysts are skeptical about the company's ability to reach those users.

``Beyond the flash of the iPod name and the newly proud Motorola marketing machine, you'd be hard-pressed to say the Rokr is a good product,'' said Paul Sagawa, an analyst with Sanford C. Bernstein & Co. in New York. He rates Motorola shares ``market perform'' and said he doesn't own them.
Last Updated: October 21, 2005 12:54 EDT

http://www.bloomberg.com/apps/news?...=top_world_news

Posted by: macizcool

Jees... Motorola could come out with a new version of the RAZR soon, instead of making the same one in different colors

Posted by: djkibilz

people are expecting their CELL PHONE to do everything...100 songs is enough...you cant compare it to an ipod because a phone can do so much more than an mp3 player...i don't think i can punch in my friends number on my ipod and talk to him...

Posted by: boston_errol

The phone is WAY overpriced.

Posted by: Jovian

honestly i love the phone! I like it much better than my RAZR.

Posted by: CA

Quote:

Originally Posted by djkibilz

people are expecting their CELL PHONE to do everything...100 songs is enough...you cant compare it to an ipod because a phone can do so much more than an mp3 player...i don't think i can punch in my friends number on my ipod and talk to him...

” i don't think i can punch in my friends number on my ipod and talk to him...”

Then why do you think 100 songs is enough?

No one expects a cell phone to do everything except the manufacturers and carriers. Ipod’s got popular because they do what they do well and look good to boot.

Personally I think until people have no reason to complain about their phone’s bad reception or the fact that their screen goes bad etc. why bother buying a device that costs so much and does so little well.

Posted by: VanillaGorilla

A big part of the problem you're overlooking here is two-fold, IMHO.

1 - They released it the same day as the iPod Nano, at about the same price. Anyone looking for serious music capacity would just buy a Nano and a cheap cell phone. Either the song capacity has to go up on the ROKR, or the price has to come down. Plain and simple.

Bigger part...IMHO:
2 - The ROKR is an E398 with one extra button essentially. Any cell phone junkie knows there's a MonsterPack out there to turn the E398 into a ROKR, and an E398 can be had for $100 less than the ROKR. Any cell phone junkie knows this (or anyone who frequents these forums) and isn't going to run out and get a ROKR.

MtA

Posted by: macizcool

Quote:

Originally Posted by djkibilz

The problem is that they are advertising the phone (indirectly) as an iPod phone. And iPods hold way way WAY more music than 100 songs. This isn't the year 2000 anymore. We are used to being able to carry most, if not all, of our music collection with us. So if you are going to advertise an "iPod" phone (although it isn't called that, you know it's what people are thinking), you need to have iPod-esque storage for music. And again, as many have realized, it's waaaaaaay overpriced. I cannot emphasize that enough. I wouldn't spend more than $100. on that phone.

Posted by: I have a phone

I love this thread.

Posted by: PhantomFone

>>The response to the phone blemished an otherwise better-than- expected earnings report from Motorola, the world's No. 2 mobile- phone maker.<<

Who is No. 1?

Posted by: tendura

Quote:

Originally Posted by PhantomFone

>>The response to the phone blemished an otherwise better-than- expected earnings report from Motorola, the world's No. 2 mobile- phone maker.<<

Who is No. 1?

Number 1 would be Nokia.

Posted by: PhantomFone

Quote:

Originally Posted by tendura

Number 1 would be Nokia.

Thats what I thought. Thanks!

Posted by: CA

Nothing for nothing, but I believe Moto is number 1 in the us.

Posted by: djkibilz

Quote:

Originally Posted by VanillaGorilla

A big part of the problem you're overlooking here is two-fold, IMHO.

1 - They released it the same day as the iPod Nano, at about the same price. Anyone looking for serious music capacity would just buy a Nano and a cheap cell phone. Either the song capacity has to go up on the ROKR, or the price has to come down. Plain and simple.

Bigger part...IMHO:
2 - The ROKR is an E398 with one extra button essentially. Any cell phone junkie knows there's a MonsterPack out there to turn the E398 into a ROKR, and an E398 can be had for $100 less than the ROKR. Any cell phone junkie knows this (or anyone who frequents these forums) and isn't going to run out and get a ROKR.

MtA

well you can get a ROKR for around $180...i got mine for $180...alright so you put it that you can get the E398 for $150, then you have to get the data cable for $10...$160...and plus you have to take time out to do all this flashing and flexing for a price difference of $20.

Posted by: VanillaGorilla

Quote:

Originally Posted by djkibilz

$180 with a contract or no contract price? Let's be fair here, because the price I'm quoting for the E398 is no contract off eBay.

MtA

Posted by: macizcool

The E398 is also a much better looking phone than the ROKR.

Posted by: CA

isn't the E398 a 900Mh phone?

Posted by: MistaRaddical

Technically, but you can flash it to be quadband therefore enabling the 850 band, therefore the same as the ROKR for $200 less [When I went into Cingular, the phone was $399 retail, and the E398 can be had $170 plus shipping from howardforums.com]

Posted by: DaleJr#8

Quote:

Originally Posted by Sonix

isn't the E398 a 900Mh phone?

by native nature yes, it is a 900MHz phone.

but that can easily be changed by a pretty simple software flash to enable the 850 band like I've done and so many others as well.

Posted by: Rcadden

lets not forget that the d@mn thing is slightly crippled, as well. It has a 512MB TF, but can only hold 100 songs? Even at 4MB/song, there's 28 songs there that are being wasted.

Also, on a music phone like that, I think it would be a bigger seller if it had AD2P, for BLUETOOTH stereo headsets.

Posted by: what_up

Quote:

Originally Posted by Rcadden

lets not forget that the d@mn thing is slightly crippled, as well. It has a 512MB TF, but can only hold 100 songs? Even at 4MB/song, there's 28 songs there that are being wasted.

Also, on a music phone like that, I think it would be a bigger seller if it had AD2P, for BLUETOOTH stereo headsets.

You can put more than 100 songs. 100 songs limit only applies to the iTunes songs. You can store non-iTunes MP3 songs to the phone and play them using the java based MP3 player that comes with the phone. You just can't use the iTunes software to download and play more than 100 iTunes songs. This is something Apple did so that it does not affect the sales of their i-pods. They don't want MP3 phones to eat at their iPod business.

Posted by: CA

Click to Zoom What was expected to be the next-generation MP3 player, the all-in-one mobile device, the mobile phone of mobile phones, may have not had enough of it all to entice consumers. The Motorola ROKR, which features iTunes and a 100 song limit, has been failing according to Cingular Wireless and Motorola’s CEO, Ed Zander.

Cingular is reporting that results are slim after one of the most intense ad campaigns the company has put on. Zander says he is disappointed with the phone’s marketing and plans to fix it, so maybe Cingulars efforts are to blame? The ROKR has only sold 83,000 units a week, compared to the 500,000 a week that sold for the RAZR.

Six times as many customers are returning the ROKR, , according to American Technology Research analyst Albert Lin, who was advised by distributors, retailers and call center workers at Cingular Wireless LLC, which sells the phone.

Some reasons could be the lack of capacity on the ROKR, or the lack of functionality for users to purchase songs directly from the phone. Also the 100 song capacity is very limiting, rivals Samsung and Nokia have the i300 with a 3GB of storage and the Nokia N91 with 4GB storage offering much more storage.
http://www.mobilemag.com/content/100/344/C4890/

Posted by: JJhomer83

The worst part of these phones is the software issue that I have been having. It's been past 30 days since I have purchased the phones otherwise I would return it for Razr's. Now i am stuck with this phone. B/c there is no equal to the phone yet.

Posted by: CoreyTheGent

iTunes Phone Sales OK, but It's No nano
10/24/05 | Amanda Cantrell for CNN/Money

Despite mixed reviews, Motorola's highly anticipated iTunes enabled cell phone ROKR hasn't flopped. But are techies getting what they expect?

Motorola said recently that in terms of sales, the ROKR is doing just fine – according to the company, it sold 250,000 ROKR phones in the third quarter, within about three weeks of its launch.

Those numbers, while not indicative of a runaway success story, may still be a positive surprise given the mixed reviews and numerous controversial reports surrounding the ROKR.

First, the highly anticipated phone's launch hit several delays before finally debuting on Sept. 7. When it launched, the ROKR was promptly upstaged at the very same press conference when Apple CEO Steve Jobs unveiled the ultra-sleek iPod nano, which at around $249 for a four-gigabyte model costs the same as the ROKR and holds 10 times as many songs, at a fraction of the ROKR's size.

Critics also criticized the ROKR's design, which simply could not match the sex appeal of Apple's nano or Motorola's RAZR, its hugely popular flip phone.

Now, new research has revealed that customers are returning the phone at a rate of three to six times the industry average for cell phones, according to American Technology Research analyst Albert Lin.

Recently, Motorola chairman and CEO Ed Zander publicly criticized his company's own ad campaign, saying the company didn't make it clear enough to consumers that the phone only holds 100 songs, according to a Newsday report.

"People were looking for an iPod, and that's not what it is," he said, according to the report. "We may have missed the marketing message there."

Zander also reportedly had some choice words for the nano. At an industry event last month in Silicon Valley, trade publication Macworld reported that Zander responded to a question about the nano defensively, saying, "Screw the nano. What the hell does the nano do? Who listens to 1,000 songs?"

Motorola issued a statement saying Zander was joking and that his comments were taken out of context.

"During the Q&A session one questioner asked what Zander thought of the nano," the statement said. "Jokingly, Zander said he wasn't there to talk about the nano -- but to talk about the next big thing happening in the industry -- the fusion of the phone and music. ROKR with iTunes was a good beginning, he said, and there's more to come."

Given these setbacks, the phone's sales are something of a surprise. American Technology's Lin believes the phone's sales are ahead of the company's expectations, which he estimated were in the 150,000-200,000 range for the third quarter.

Record returns for ROKR?

So why is the ROKR getting a bum rap? Some analysts say the phone's debut was so widely anticipated that it would have been nearly impossible for the phone to live up to its pre-launch hype, setting consumers up for inevitable disappointment.

Lin said customers have been returning the phone at rates that are three to six times higher than the industry average, which he estimates to be in the low single digits.

Lin credits part of the higher than average return rates to the fact that the first customers to snap up the ROKR probably fit into the "early adopter" category, which he said is a highly demanding customer base.

They may also have been disappointed that the product was less an iPod phone than a cell phone that comes with iPod – and only holds 100 songs. That makes the phone a high-maintenance device, Lin said.

Finally, the software has been plagued with bugs, Lin said, adding to the maintenance level.

Added John Bucher, an analyst at Harris Nesbitt, "The more complex a product, the more likely you are going to find a return, whether there is a real defect there or not."

Bucher, who worked for several cellular phone carriers before becoming an analyst, said he thinks the phone isn't doing as badly as reports suggest.

"I have a sneaking suspicion that Motorola is making money on this product," he said.

It's no nano

By far the most controversial issue surrounding the phone has been the amount of songs it can store, however. Media reports have suggested that Apple deliberately kept the number low, so that the ROKR would not pose a real threat to sales of its iPod. Apple did not return a call for comment by press time.

"There has to be some friction because I think Motorola did not want the ROKR to be hobbled with 100 song limits," said Lin. "I think Apple was emphatic about that because they were trying to move slowly in the mobile phone world to make sure they don't set a precedent for something that could damage iPod sales."

Motorola said in a statement, "Motorola has a great partnership with Apple... A whole family of music phones is on the way -- some might hold more than 100-songs."

Ittai Kidron, an analyst at CIBC World Markets, said the 100-song limitation may not be as much of a setback as ROKR's critics have made it out to be, pointing out that the product will likely appeal to people who don't already have an iPod.

Ittai added that the ROKR is Motorola's first generation music phone, and that, like other new technologies, it may take awhile to gain traction.

"The next generation of phones to have that functionality will see much more broad adoption," he said, adding that the ROKR's sales figure "is not disappointing by any means. It's a start, and it's a good start, but there is still a long path. Don't forget the RAZR was slow for couple quarters when it came out. Things take time to marinate."

The company is hoping to give that process a shot in the arm, starting with the recent launch of a television ad campaign featuring celebrities such as Madonna.

Now, analysts and investors are focusing on the holiday season, which should give an indication of the phone's popularity with consumers.

"That will be the real test," said CIBC's Kidron.

CNN/Money

Posted by: shawncv79

Quote:

Originally Posted by Sonix

Nothing for nothing, but I believe Moto is number 1 in the us.

Think again...

Quote:

Originally Posted by VanillaGorilla

Bigger part...IMHO:
2 - The ROKR is an E398 with one extra button essentially. Any cell phone junkie knows there's a MonsterPack out there to turn the E398 into a ROKR, and an E398 can be had for $100 less than the ROKR. Any cell phone junkie knows this (or anyone who frequents these forums) and isn't going to run out and get a ROKR.

its been done, and is easy...thanks to my buddy errol

Posted by: CA

Quote:

Originally Posted by shawncv79

Think agan

Well… I have seen it in print. Can you point me to a better sourse?

Posted by: CoreyTheGent

There's no need to. "shawn" was simply mistaken. Motorola is the #1 manufacturer in the United States by a wide margin while Nokia is beating Motorola universally by about 13%. I haven't seen the American figures in a while but I believe Samsung is also ahead of Nokia in terms of US sales.