Mobile working Toolkit

Mobiles rise to the iPod challenge

John Borland and Ben Charny CNET News.com

Published: 12 Nov 2004 15:50 GMT

When Gilles Babinet looks at a mobile phone, he sees a music store, an iPod and even a nascent platform for a tiny-screened MTV.

The curly-haired Parisian is the chairman and founder of Musiwave, the company that powers Vodafone's new mobile phone music download service, which launched across Europe this week. He's sure that huge numbers of people will eventually find it natural to buy and listen to music on mobile phones -- but in some countries more than others.

"In Europe, phones are probably the only effort that can really compete with iTunes," Babinet says, noting that more Europeans are more likely to adopt music on mobile phones than they are to buy songs from Apple Computer's download service. "The attraction for customers in the United States may be less, because iTunes is so much more developed."

The potential of mobile devices as a music delivery platform is clear. There are hundreds of millions of mobile phone owners, particularly in European countries where penetration rates can be as much 80 percent of the population. That pool represents a vastly larger potential market than the millions of people who use iPods or other MP3 players.

But companies that sell content for mobile devices face different marketing and technological challenges compared with businesses that deliver PC-based online services. Some now see the markets as distinct rather than competitive. That's raising the spectre of two kinds of service, with separate pricing models and possible walls that would prevent music purchased on mobile phones from being transferred to a PC, and vice versa.