Wired 13.11: Battle for the Soul of the MP3 Phone: "Consumers want an iPod phone that will play any song, anytime, anywhere. Just four little problems: the cell carriers, the record labels, the handset makers, and Apple itself. The inside story of why the ROKR went wrong.* (*And what it will take to make a truly rocking music phone.)
Will Apple make its own phone, as so many pundits have sug-gested? Perhaps - and an iPhone would no doubt be cooler than the ROKR. In theory, Apple could even become a virtual network operator like Virgin Mobile, leasing network capacity from one of the carriers and reselling it to consumers under the Apple brand. But that wouldn't solve its problems: The company would still be beholden to a carrier. Jobs is right when he says Apple is no good at going through orifices to reach the consumer. He should know better than to mimic the orifice mentality himself.
Apple won the loyalty of music fans through elegant design and brilliant marketing. Using DRM as a digital tether will do nothing to hold them. Last January, an irate iTunes user put Apple in the same camp as Verizon by filing a class-action lawsuit over the limits FairPlay puts on music bought online. Consider it an omen: The quest for control - by carriers, by music labels, or by Apple itself - is a hopeless affair that can end only in disappointment for all concerned."
Seems pretty clear to me that Apple is placing a few all-or-nothing bets; it will have only itself to blame if it ends up with a paltry share of a market segment it popularized (e.g., as is the case with the Mac today).