Apple cagey over rumours iPhone launch is imminent

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By  Published  December 1, 2006

Industry speculation regarding Apple’s purported move to develop an iPhone shifted gear last month, with the company refusing to deny rumours it plans to introduce the device at its annual MacWorld conference in San Francisco next month. The launch of a hybrid mobile handset-iPod music player would mark a monumental shift in strategy for Apple, pitching it against new rivals and mobile handset industry heavyweights Nokia, Sony Ericsson and Motorola. Since launching the iPod five years ago, Apple has sold more than 67 million units worldwide, in addition to more than 1.5 billion songs from its iTunes online music store. The iPod has been hailed as a modern-day cultural icon and for having a cataclysmic impact on the music industry not seen since the advent of MTV and Sony’s Walkman cassette player in the 1980s. Apple previously combined with Motorola to provide iTunes on the company’s ROKR handset, but the deal was widely derided due to the phone’s limited storage capabilities. Fuelling speculation further was a report in the Taiwanese financial daily, Commercial Times, which claimed Taiwan-based Hon Hai Precision Industry Corporation is building the iPhone. Industry pundits suggest the handset will be a bar-style phone and not a slider or flip-top. It is also expected to be relatively simple in terms of its functionality and modeled closely on the small-form iPod nano in terms of size, features and aesthetics. Speculation also extends to whether the handset will be based on the CDMA or GSM standard, and whether Apple intends to tie with cellular service providers or develop a network agnostic handset. Meanwhile, Apple’s latest rival in the digital music space, Microsoft, has confirmed it will share revenues from its new Zune MP3 player with music publisher Universal Music Group in an unprecedented deal. The contract will see Microsoft pay Universal and its artists with a cut of Zune profits, in addition to copyright payments for music distributed online. Microsoft said it planned to offer similar deals to rival music publishers, a move perceived by many observers as the company currying favour with the music industry in a bid to undermine Apple’s domination of the sector.

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