The music phone is already here - Sendo

CANNES, France: As three of the world's top six mobile phone makers announced music-playing phones at this week's 3GSM wireless trade show, Britain's privately held Sendo said it was the only handset maker that could already show a model.

Sendo's X2 smartphone with a built-in music player that can deal with almost all digital music encoding formats, will be available in April at 99 pounds ($187) for pre-paid subscribers, said Hugh Brogan, the chief executive of the Birmingham-based company.

Nokia and Sony Ericsson joined Motorola this week in announcing they would tap the online music revolution with phones that could play several digital music formats. No designs were unveiled, however.

Sendo, meanwhile, presented a phone that can play back music in the popular and open formats MP3, AAC and AAC+, and said it was in discussions to add two or more proprietary formats.

Microsoft's Windows Media and Apple's iTunes Music Player are the two most popular proprietary digital formats in the market, but Brogan declined to comment on names.

"We're working on others," Brogan said.

So far, Motorola is the only handset vendor to announce it will have an iTunes player for its future music phone, dubbed ROKR. Nokia would support Windows Audio as well as open standards, and Sony Ericsson would support only open standards.

The handset has been designed to offer music quality similar or better than portable digital music players and has dedicated buttons to play, pause, stop and skip tracks.

Employing 300 staff, Sendo generated revenues of $420 million, compared with $120 million in 2003.

Handset vendors together sold 684 million phones last year, with the top six accounting for almost 80 percent of those.

Sendo sold 5 million phones last year, up from 1.6 million units in 2003 and Brogan expects to sell 6.5 to 7 million handsets this year.

Sendo, which "bumped in and out of profitability" despite heavy investments to expand operations, was looking to raise additional funds with banks and strategic investors, Brogan said. He ruled out an initial public offering though.

"The distractions of being a public company are too big. This is a fiercely competitive industry. We have to stick to our knitting and focus on the job," he said.

Sendo started out as a niche handset supplier to operators that needed tailored designs and software.

Initially it sold mostly to small operators who wanted a special design to make their handsets stand out from larger rivals, but as of late Sendo has also sold to global operations of Vodafone and Telefonica.