Apple will transform iTunes into a wireless service for the new iPhone, or create a wireless offshoot of iTunes within the year, Pike & Fischer predicts in a report that analyzes the U.S. mobile broadband market.
The business and legal publisher says Apple will have to take such a step to remain competitive, as consumers will increasingly demand the ability to download music and video clips over the air.
“Consumer expectations will advance to the point where they will eschew reliance on a PC and cable to get content onto their iPhones and other portable devices,” said Senior Analyst Tim Deal, the lead author on the report. “Apple will therefore be forced to offer over-the-air downloads to remain competitive.”
AT&T, the distributor of the iPhone, launched its own music download service for its wireless customers, but it does not work with the Apple device, which hit the market June 29. AT&T rivals Verizon Wireless and Sprint Nextel also offer music downloads for their customers.
The report also predicts that Apple will have to revisit its pricing strategy for the iPhone, which can run up to $600, after it has been on the market for a few months and demand starts to fluctuate. Additionally, Verizon Wireless is likely to launch an iPhone alternative, in collaboration with a handset manager such as Samsung, in time for the 2007 holiday season.