Michael Gartenberg hits the nail on the head
Good stuff, including this:
Bottom line, carrying a phone along with a Shuffle, Nano or Sansa is not a burden. Those devices are so small as to be ubiquitous. Unless the phones can start to meet even the most basic function of dedicated players, they will have a hard time co-existing with them, much less displacing them. Forget OTA song purchases. Make the phones better first. How to make a music phone good enough to useAfter carrying the new shuffle around for a week this is more obvious than ever. I've been using it pretty heavily, and the second charge cycle isn't even dented. It's so light that if I knock it off my clothing it just hangs harmlessly from the earbud cable, and so small that I can lose it in a pocket. Yes, the whole thing is barely bigger than the screen on my favourite (smaller) cellphone yet has a better interface for playing music although there's no display; and when the battery dies I just pocket it and move on, not panic about missing calls.