Motorola Faces Music

It takes another shot at song phones. The results are decidedly mixed.
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One of these days, the telcos will get the music phone right.

Verizon Wireless, a joint venture of

Verizon

(VZ) - Get Report

and

Vodafone

(VOD) - Get Report

, is expected this week to unveil V Cast Music, a mobile downloading service using the company's speedier wireless network. And

Motorola

(MOT)

is planning to introduce iRadio, a $7-a-month music subscription service designed for use via computer downloads to cell phones.

Last year's deeply disappointing marriage of

Apple's

(AAPL) - Get Report

iTunes and Motorola's Rokr started the big music trend in wireless off on a sour note. Critics found the highly-anticipated phone ugly. Plus, in a concession aimed at avoiding any threat to the iPod, Motorola gave the phone a capacity of just 100 songs -- a shortcoming that was widely seen as limiting the Rokr's popularity.

Motorola's second crack at the music phone, called Rokr E2, is expected early this year. It will ditch the iTunes format and hold about 70 hours of music that can be loaded first to a computer via the Internet, then onto the phone.

Industry watchers say they are confident that one day, music phones will live up to expectations. But for now, Motorola's latest efforts still miss the mark.

"It's an ugly detour, and an acknowledgement of how challenging of a business model it is to offer music," says Ovum analyst Roger Entner, referring to the iRadio idea. "There are phones that already have an FM tuner in them -- why do I have to pay $7 a month for radio?"

Motorola's iRadio service will compete with online music subscription services like Rhapsody and

Napster

(NAPS)

as well as satellite broadcasts from outfits like

Sirius

(SIRI) - Get Report

and

XM

(XMSR)

. In fact, Sirius and

Sprint

(S) - Get Report

have an agreement to offer 20 channels of music for a monthly charge.

Verizon Wireless has preferred the so-called walled garden approach to its digital media offerings. The New Jersey wireless giant prefers to sell video clips, ringtones and soon songs through its own V Cast wireless service.

The biggest hurdle to truly mobile music is getting the tunes. Over-the-air downloads are relatively costly and time consuming, at least compared to PCs with fast Net connections. Apple sells songs for $1, while wireless telcos charge about $3. And while the PC crowd can load dozens of songs in minutes, phone users take much longer.

Verizon Wireless is banking on the music fans' need to have a song now to drive impulse purchases. And maybe music can follow calling's success: Millions of people have purchased cell phones despite the poorer quality and higher costs of the service compared to conventional phones.

The music phone will become a hugely popular device, says Ovum's Entner. But only "with the right software and a good connection through the air," he adds.

"Motorola has been able to get form factors right," says Entner, "but they can't get the other parts to the puzzle yet."