=====originally dated April 16=======
By Deborah Cohen
Motorola Inc. is betting consumers will pay to have it both ways, gaining control over the content on their car radios and the flexibility of taking their music with them on their cell phones when they turn off their engines.
Motorola, the No. 2 maker of mobile telephones, is set to unveil a service called iRadio that will let users download preselected audio content from a range of providers on their home computers, dump it on their cell phones and listen to it on their car stereos.
The company is banking on the popularity of portable music underscored by sales of Apple Computer Inc.'s iPod digital music players and growing demand for high-quality, commercial-free radio provided by satellite radio companies Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.
"What we set out to solve was finding a way to get the breadth of content into the stereo where people listen," said David Ulmer, director of marketing for Motorola's media solutions business. "We looked around and noticed that everyone had a cell phone in their pocket. There is a very large market of potential customers to go after."
The iRadio service, which will let customers download 10 hours of content at a time, will be available at the subscription cost of about $5 to $7 a month. When not driving, customers can listen to content on a phone with a headset.
By comparison, Sirius and XM charge about $13 a month for access to more than 100 channels; an online music content provider gets about $15 in the same period for unlimited downloads to a computer, or digital music player. Apple's iTunes music library charges about 99 cents per song.
"It's just another way to offer entertainment on the cell phone," said Albert Lin, an analyst with American Technology Research.
In a recent research note, he called providing preselected audio content for cell phones "a massive market opportunity."
Several companies are already betting on the potential, boosted by the popularity of a multitude of cell phones that enable music downloads.
Clear Channel Communications Inc. the top U.S. radio operator, earlier this week said it plans to begin offering clips of programs over handsets by the end of 2005.
Outside of the United States, operators like Virgin Radio in Britain and Swedish broadcaster SBS Broadcasting System SA are creating interactive radio to deliver to users.
COMPLEMENT TO iTUNES?
Motorola has already seen the value in delivering music content. Through a partnership with Apple, it will soon launch a cell phone that works with the Apple iTunes service.
But iRadio requires a substantial up-front investment. A customer will initially lay out about $200 for a mid-range Motorola phone with at least 256 megabytes of storage, built in iRadio software and Bluetooth, a low-range wireless technology that streams content from the phone to the car radio or home stereo, Ulmer said.
The service also requires buying a $75 wireless audio adapter that must be installed in the car radio, either by the customer or a service provider. A USB connector to hook the phone to the desktop computer comes packaged with the handset.
Ulmer said Motorola plans to test the service in several U.S. markets in mid-May and launch nationwide in the fourth quarter. The company is also in discussions with several music content and wireless service providers, he said, but he would not provide specifics.
Motorola will begin selling the iRadio service at retailers, but it is also in talks with auto companies, who may eventually install iRadio in luxury cars, similar to arrangements that satellite radio providers have, Ulmer said.
(With Sue Zeidler in Los Angeles)
Copyright 2005 Reuters Limited.
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