June 17, 2005

Seventy-five years after it sold its first car radio, Motorola wants to get back into your dashboard.

The world's No. 2 handset manufacturer is preparing to beta test iRadio, a digital music service that uses cell phones to link consumers' home PCs with their car stereos.

With the new offering, users will be able to download streamed music, talk and "Podcasts" from home computers to phones via USB cables, then play the audio through their car stereo systems with Bluetooth connections. The service will support a variety of music files including MP3, AAC and WMA.

Motorola is set to begin testing the service within days in Washington, D.C., and Los Angeles, two markets where motorists are often mired in traffic. The company hopes iRadio, which is slated to launch nationwide in the fourth quarter of this year, once again puts Motorola in the driver's seat of the automotive music market.

Consumers away from their vehicles could also use iRadio phones on the go with headphones. But Dave Ulmer, Motorola's director of product marketing for Connected Home Solutions, said the service is targeted directly at the consumer behind the wheel who's no longer pleased with the choices on the FM and AM dials.

"The (traditional car sound system) works just fine; car stereos are great," Ulmer said. "What's broken is what's coming out of it; it's the user experience. It's lowest-common-denominator programming."

Motorola hasn't announced any deals with content providers yet, but promises hundreds of commercial-free Internet stations to choose from, as well as allowing users to move their own content onto phones. Handsets that support the service will have six "preset" buttons-one for each Internet channel a user chooses to download-and will initially have enough memory for about 10 hours of music.

Consumers will be able to pause, fast forward and rewind the content through their in-dash decks, which will need Bluetooth adapters. And the playback will automatically pause when a call comes into the phone.

While only Motorola phones will support the service at launch, other manufacturers' handsets could be equipped to work with iRadio. The service is expected to cost $5 to $7 a month-about half the cost of a satellite radio subscription-and iRadio phones will cost about $200. The in-dash Bluetooth adapter adds another $65 or so to the bill.

Although iRadio will compete directly against satellite music services, Motorola would consider adding content from XM Radio or Sirius. The abundance of music services on the Internet allows a handset manufacturer to act as a simple aggregator of content for iRadio, Ulmer said.

"We are not going to program content; we are not purchasing content," he said. "We are partnering with those people who do that and do it very well. There is just a wealth of companies out there who do that for a living."

While U.S. carriers have been slow to embrace any music service that isn't delivered directly through their networks-witness the long-delayed Motorola "iTunes phone"-Ulmer insisted the off-network transfer of music files is one reason operators are open to iRadio's service.

"The carriers are not really concerned that everything must go over the carrier network," said Ulmer, who declined to discuss specific operators. "We've done this in a way that will not burden or overtax the network or bring it down to its knees."

But the service will include daily updates over cellular networks that will boost data revenues. Subscriptions will include the automated delivery of time-sensitive information like traffic updates, breaking news and sports, requiring users to buy data service packages from their carriers. What's more, content will include metadata such as song title, artist and label that will be displayed on the stereo face, potentially allowing users to purchase songs and CDs over the network.

"The key is to focus on the car experience. That's where we saw the strongest consumer demand," said Ulmer. "We're right back where we started."

Source: RCR News