Chocolate is one of the first converged devices to look and feel like a music player and might have a shot at weakening the iPod's grip on cool. Its sleek, high-design black case responds to the touch by lighting a red music-control dial. A so-called slider-style phone, its number keypad slides out from the bottom. Launched in South Korea this spring, Chocolate has sold 1 million devices since its rollout in Australia, Latin American and Mexico.
No V-cast fee
Verizon Wireless also is trying to sweeten the offer by eliminating its $15 monthly V-Cast music fee. "We have eliminated a major barrier," said John Harrobin, VP-advertising and digital media, Verizon Wireless. The phone, at $149.99 with a $50 rebate and two-year service contract, also will be priced considerably below most iPods.
In the U.S., Verizon Wireless has an exclusive on the Chocolate and plans an extensive marketing push, making it one of the centerpieces of its back-to-school and holiday effort. "It is the largest handset launch we have ever had," said Mr. Harrobin.
The budget was undisclosed, but in the second half of 2005, Verizon Wireless spent $715 million in measured media, according to TNS Media Intelligence. LG plans to supplement the push with its own print, event sponsorships and other media efforts.
Interpublic Group of Cos.' McCann Erickson, New York, is Verizon Wireless' agency. Brand Buzz handles LG's advertising, while Moxie Interactive handles online.
Mr. Harrobin said Chocolate is not intended to compete directly with the iPod, which he called "the world's most recognized music device." Rather, he said, it's much more, "a total solution for many folks."
Mobile distribution has proved to be one of the most powerful ways for artists to release music, and a number of artists are electing to distribute songs first on mobile devices, then release them later through traditional channels. "We have proven in the last six months that mobile music doesn't cannibalize music," he said.
Mr. Harrobin said that in March, Shakira and Wyclef Jean released the single "Hips Don't Lie" and other content on V-Cast, two months before sales through other distribution channels. It jumped to No. 1 on the charts upon its general release, he said. "We are now way beyond ringtones and ring-back tones on phones."
Chocolate users will have access to Verizon's 1.3 million V-Cast Music Collection. They can also buy music over the air for $1.99 or download songs to a PC for 99 cents. Existing MP3 collections can be transferred free to the device. The device also supports a microSD memory card holding to hold up to 1,000 songs. Music can be selected by full-track downloads, ringtones, Ringback Tones or music videos.
'Everyone loves chocolate'
Jon Maron, senior director-marketing, LG Electronics MobileComm USA, said the phone was named Chocolate because the confection is "sexy, seductive, and a powerful temptation." Besides, he said, "Everyone loves chocolate," which happens to be the campaign's tagline. Teaser ads feature the phone being unwrapped like a candy bar.
Apple, with its iTunes service, said it has some 80% market share of digital downloads. In addition to Verizon, Microsoft, phone manufacturers, and other tech marketers are elbowing their way into the space.
Earlier this month, Apple Computer Chief Financial Officer Peter Oppenheimer told analysts the company doesn't think cellphones make the best music players. "We think the iPod is, but over time that's likely to change. And we are not sitting around doing nothing."