Apple's iPod to set European mobiles ringing

reuters.com
Fri Sep 2, 2005 1:56 PM ET16

LONDON/BERLIN (Reuters) - European mobile phone operators are jumping on the iPod bandwagon and hope to secure deals that will give them access to a wealth of hot tracks from Apple Computer Inc's famed iTunes music store.

Germany's T-Mobile, the mobile phone arm of Deutsche Telekom , said at the IFA consumer electronics show in Berlin that it planned to sell a musical mobile phone that can access iTunes, made by U.S. vendor Motorola Inc., by Christmas in Germany.

One industry source said British-based O2 Plc also hoped to announce a deal to sign up to software that powers the iconic iPod music jukebox, the world's most popular portable music player, as soon as next week.

Apple is holding a news conference in San Francisco on Wednesday. Motorola scheduled a media event in New York on the same day. In its invitation, the phone maker says: "The device formerly known as the cellphone is ready for its next act."

Motorola has long been shopping for customers for its range of music phones, which are fully compatible with Apple's iTunes music player software and some of which can now store about eight hours of songs.

The phone is designed to allow vendors and operators to tap into the digital music market, which has exploded over recent years, prompting handset competitors Nokia and Sony Ericsson

to set up deals with online music services companies such as Sony Connect and Loudeye.

Analysts expect U.S. cell-phone group Cingular Wireless, the joint venture between carriers SBC Communications Inc. and BellSouth Corp., to also sign up for the Motorola phone. A T-Mobile spokesman declined to say if the phone would also be sold by the operator in Britain and the United States.

Apple was not immediately available for comment. Cingular and O2 declined to comment.

But the British-based mobile phone company, which currently charges between 1.0 pound and 1.50 pounds to download a music track, has long stated that music remains a key element of its portfolio.

For its part, T-Mobile already has its own music store, called mobile jukebox. But the company said it no longer believed in the so-called "walled garden" approach, where customer choices were limited by operator offerings.

Operators were hoping to get better control and a higher share of the revenues via the walled-garden approach But T-Mobile now says it had learned that customers would start using their Internet-ready mobiles only if they could use every Internet service they are used to -- such as search engine Google, auction site eBay, or Apple's iTunes.

"Our strategy is no longer to offer one product and tell our customers: 'Take it or leave it!'," a T-Mobile spokesman said.

"Those who want to use (mobile jukebox) can go there. Those who want iTunes can go to iTunes."

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