iPhone Marketing Giving Boost to Mobile Music

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Mobile phone operator Orange is expecting the iPhone to raise awareness of its mobile music services -- but it's with Sony Ericsson that it is working to market its music portal in nine European countries.

Speculation is rife as to which mobile operators will clinch deals to distribute Apple Inc.'s music-playing iPhone when it goes on sale in Europe in November -- rumors say almost all the big players are in with a chance -- but the hype Apple's marketing is giving to mobile multimedia services is already giving a boost to the mobile music market, said Yves Maitre, senior vice president of devices at Orange, the mobile phone and Internet access division of France Tilicom SA.

"Apple is helping the market to realize how important content is for customers," Maitre said Tuesday. "The fact that Steve Jobs decided to extend the iPod to the iPhone will help people realize how strong is the value proposition of the mobile phone."

Maitre would not say whether any of Orange's nine European networks are in talks with Apple about distributing the iPhone.

Orange already has a partnership with one music phone manufacturer: Sony Ericsson Mobile Communications AB, and the two are getting closer as they work together to develop and promote new services, Maitre said. Over the last year, Orange has sold over 2 million of the company's Walkman-branded phones with access to its Orange Music Store -- more than all the other manufacturers' music phones put together, Maitre said. He expects to sell a million more by the end of the year.

The iPhone can play music and videos from Apple's iTunes store -- but only if they are downloaded to a PC and then copied to the phone over a USB (Universal Serial Bus) connection. Sony Ericsson's Walkman phones, on the other hand, can download music directly from the Orange Music Store over a 3G (third-generation) mobile data connection.

Orange is working with Sony Ericsson to improve the streaming music service it offers in France, where for a monthly subscription fee of ,6 (US$8.30) customers can listen to music wherever they have access to the mobile phone network. For the moment, that rules out listening in most of the Paris Mitro underground transport system, where network coverage is poor, but Maitre says the company is developing a new DRM (digital rights management) system that will allow customers to download a tune once, and then listen to it repeatedly as long as they remain subscribers. The new feature will only work with new phones however: the 2 million customers who have already bought their Walkman will have to stick with the streaming service.

The two companies are also co-sponsoring a series of online talent searches for unsigned bands. After piloting the contest in Switzerland, and now launching it in the U.K. with TV network Channel 4, the companies say they are looking at extending the contests to the other European countries where Orange operates. Competing bands are encouraged to use their mobile phones to film themselves playing, and upload the videos to the contest Web site.

Although between 3 million and 4 million Orange customers have phones that can access Orange Music Store, as few as 10 percent do so today, Maitre said. It will take a year or two to get that figure up to 30 percent, he said.

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