25 Song Cap on iTunes Phone?

Forbes is reporting that Apple and Motorola's plans for an iTunes enabled phone that has been long discussed may "underwhelm" due to a report that the phone is designed to accomodate just 25 songs.

According to one person who has reportedly seen the device:

The phone was equipped with a 128-megabyte Sandisk TransFlash memory card--just one-quarter the capacity of Apple's smallest iPod, the 512-megabyte shuffle, which holds about 120 songs.

Even with larger storage cards placed in the phone, "the phone's software appears to artificially cap song storage at 25 songs, regardless of how much memory the phone has."

Of course, this early report comes with many caveats... as this may not be the shipping version or there may be multiple versions to be announced. All eyes point to a September 7th Media event announced by Apple earlier this week.