02 is to launch its first music-focused mobile phone handset. This follows similar announcements by the likes of Sony which is to launch a range of Walkman-branded handsets.

MP3 and AAC music formats will be supported on the 02 XM and handset owners will be able to choose from approximately 130,000 tracks they wish to download. A mini USB connection will enable PC owners to drag and drop music and images on to their hard drive from the handset.

The triband 02 XM will run a 312MHz Intel Manitoba processor, feature GSM, GPRS, a 260K colour screen and a 1.2Mp (megapixel) built-in camera. The XM will have a talk time of four hours and a 250-hour standby. Music and images will be stored on an SD card.

Music downloads from the Siemens SDC service will take about three minutes each with onscreen software on the handset pushing owners to check out the latest chart tunes and additions to the online library.

DRM restrictions mean it won’t be possible to simply insert a friend’s SD card and play their legitimately purchased music. However, the setup for all DRM-based services should get a little less draconian as improvements are made to DRM software.

Speaking at an Intel in Communications event that highlighted the capabilities of the chipmaker’s mobile processors, Steven Harrison, head of 02’s branded services, said the XM handset had been designed to reflect consumers’ “interest in lifestyle rather than simply voice”.

Harrison explained that 2005 figures show 68% of teenagers own a mobile phone and, by 2010, the late teen market will account for the largest proportion of handset owners.

Although multimedia and personalisation options such as ringtones and wallpaper are big business, demand for music is far and away the biggest trend.

02’s partnership with Intel in the mobile market began with the first 02-branded XDA personal digital assistant. There have now been seven iterations of the 02 XDA PDA and, claims Harrison, whenever an 02 handset has gone onsale, it’s always been in the top five. On that basis we don’t expect the XM to be the one and only 02 music handset.

The 02 XM is set for launch in three-to-four weeks and, though pricing was not given, Harrison hinted that “around 35 percent of all 02 prepay customers pay less than £100 for their handset”.