The much-rumored iPhone is becoming less of a rumor as new evidence surfaces to confirm the speculation that Apple (Nasdaq: AAPL) 
is getting into the mobile phone business.
Apple has built a veritable iPod empire that just keeps getting bigger. Now, there is a paper trail that reveals Apple's intent.
"It's been discovered that Apple has patents on an iPod mobile phone. Whether or not it catches on like the iPod depends on when they introduce it and at what price they introduce it," Inside Digital Media Senior Analyst Phil Leigh told MacNewsWorld.
Several Signs
Apple filed a patent application with the U.S. Patent and Trademark Office in August. The application was disclosed Thursday and describes a device that combines a music player and a mobile phone.
The application also describes, in great detail, the casing and its "radio transparency." That means the device would allow radio waves to pass through the casing's elements.
Apple was not immediately available for comment and has not officially announced an iPod phone. However, a mid-November report from a Chinese newspaper seems to offer additional evidence that the computer maker is planning a mobile phone in the months ahead.
Apple has awarded a contract to manufacture about 12 million iPhones to Taiwan-based Hon Hai Precision, also known as Foxconn, according to several reports. Hon Hai, the world's largest manufacturer of information technology devices, also manufactures the iPod.
Expanding Its Diversity
Apple, which for many years only sold Macintosh computers and servers, found a hot ticket with its iPod digital music player. It is the market-leading player and accounts for as much as 40 percent of Apple's revenues.
An iPod phone could potentially be a huge financial boon for Apple, according to Leigh. "Apple has sold 60 million iPods since it [was] launched a few years ago," he said. "But there's 1 billion cell phones sold every year. So that's like 20 times the [iPod] market every year."
The Digital Future
This is not Apple's first attempt at a mobile phone. Apple partnered with Motorola (NYSE: MOT) to launch the lackluster Rokr line last year. It was the first iTunes phone on the market. The iPhone, however, would be an original Apple design.
It seems unlikely that an iPhone, which could emerge during the first half of 2007, would have smartphone features. An entry-level phone would leave room for Apple to introduce a professional model, as it has done with its MacBook notebooks.
"With Apple, when there is smoke there is usually fire," Tim Deal, senior analyst at Pike & Fischer, told MacNewsWorld. "The future of digital content is on-demand anywhere and Apple recognizes that."
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