November 10, 2004 8:59 AM PST

Vodafone targets iPod crowd

By Graeme Wearden
Special to CNET News.com

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Vodafone is aiming for the iPod generation with its third-generation cell phones, putting music and video downloading at the heart of its sales push.

The mobile operator launched its 3G service in 13 countries Wednesday, setting a goal of winning 10 million customers by March 2006. Vodafone will offer 10 3G handsets, all of which were being demonstrated at the U.K. launch in London. The targeted markets are Japan and a dozen European countries, including Britain, France, Germany and Italy.

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Speaking at the event, Chief Marketing Officer Peter Bamford said Vodafone will primarily target people under 35, a group he characterized as the "young, active, fun" market.

Vodafone has signed deals with record labels, including Sony BMG, EMI and Warner Music, giving its 3G customers access to an initial collection of 3,000 downloadable songs. Bamford said this list will be regularly updated and expanded in the months ahead. The songs will be on sale for $2.75 (1.5 pounds) each, but users should be able to import their own MP3 files via USB or Bluetooth.

The music service will be heavily promoted through Vodafone's 3G advertising, some of which was demonstrated Wednesday morning. In one TV ad, a 3G user is shown walking along the street listening to a music playlist on his phone. As each song changes, his haircut mutates--from long-haired curls to dreadlocks to a mohawk--until a shaggy mullet indicates that he's inadvertently reached the country music section.

Speaking later, a Vodafone executive said that the company isn't looking to replace the iPod digital music player but hopes the 3G phones will become the "only device" people needed to carry with them.

Most of the 3G phones offered by Vodafone come with up to 16MB of internal RAM and a 32MB SD card. To get close to supplanting the iPod, people would need a 1GB SD card. But when 3G mobile phones with build-in hard drives are available--possibly within a year--Vodafone will be in a stronger position.

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