During a four-hour flight delay at London's Heathrow Airport two years ago, Norman Crowley battled boredom by putting his business acumen to use. Crowley is co- ceo of Inspired Gaming Group, a company whose software transforms analogue machines into digital ones. He and several coworkers found themselves staring at a Coke machine that attracted one

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nginx/1.14.0 (Ubuntu) customer every 20 minutes. "We thought, this is crazy," it could be doing so much more.

Crowley called an old friend, Clyde Pereira, the chief information officer at Coca-Cola HBC, the company's European distributor, and told him he could make Coke's machines more profitable. Similarly, in early 2005, Stuart Farrell, retail development manager for mobile operator Vodafone UK, and Ralf Pearson, project manager at UTL, a logistics company that works with Vodafone, were discussing ways to improve distribution of prepaid mobile phones — which make up 60% of the U.K. market — when they noticed a candy machine in a tube station. Farrell joked about selling mobiles from vending machines, "and we both laughed." But Pearson wasn't laughing when he called Farrell a week later. Research suggested that the idea wasn't so wacky after all.

Those two eureka moments could help drive Europe's vending machines into the digital era. Coca-Cola HBC recently finished a six-month trial of 30 networked Coke machines at Dublin Airport in Ireland that sold mobile-phone top-ups, ring tones, games and logos — all downloaded from a central database — as well as soft drinks.

It's now fine-tuning the business model, ensuring revenues cover the technology's cost. And Vodafone is field-testing two QuickPhone kiosks that sell ready-to-use prepaid handsets and SIM cards. But the machines, located in two Manchester, England, Vodafone shops, also have broadband connections and may eventually dispense top-ups and other digital media content, too. The results look promising. The Coke machines' revenues doubled. And Vodafone's kiosk sales are exceeding expectations by 200%.

It's a big step for a very old technology. A 1st century Greek may have invented the first coin-operated vending machine to sell holy water. The modern precursor of today's machines surfaced in 1880s London, dispensing postcards. Since then, machines have been used to sell everything from, well, soup to nuts. But they've remained fully rooted in the analog world. Enter Crowley's server-based company. It transforms video-game machines to offer 30 different games instead of one, and gives jukeboxes the capacity to deliver 2.2 million songs.

Crowley expects the Coke machines could tap into that same tuneful database and sell downloads of full music tracks. That's a potentially huge moneymaker: half of all mobiles will have MP3 capacity within two years, and Coke has 2.8 million machines worldwide. They'll also likely sell wi-fi access and tickets — for everything from airline seats to events. And machine-dispensed downloads of music videos and TV shows is also a future possibility.

Since teenagers will make up a big part of the market, the Coke machines' main payment method is cash (though they accept credit cards). Vodafone's kiosks, however, also accept chip-and-pin debit cards, which is crucial given the handsets retail for a bit more than pocket change, between $55 to $150. Vodafone's goal is simple: it makes no money from selling phones, but from the voice and data traffic they deliver to its network. So it wants to get Vodafone-networked phones into as many hands as possible.

Vending machines seem to be one of the cheapest ways. Indeed, Forrester analyst Jenny Lau says the cost of sales staff is one of the biggest expenses in the distribution chain. Moreover, many customers don't need sales help because mobiles are essentially a commodity now, Farrell says. Typical kiosk buyers "know what they want, come in and get it and go." Foreign travelers are another potential market. If Vodafone rolls out the machines across the U.K. and the rest of Europe, it'll likely target train stations and airports.

But we've all been burned by machines that take and keep our money but fail to vend. Won't consumers be wary? Actually, Crowley insists, they can buy with more confidence. The network connection monitors the machines around the clock. It knows if a product's not delivered and automatically refunds the payment. Cyber-monitoring also lets vendors save money by better managing inventory. And it provides security, sending out instant alerts of any tampering or theft attempts. Still, given that Vodafone's machines are crammed with a range of cool mobiles, they also have robust alarm systems. Just in case.

• THOMAS K. GROSE
• Forget the chocolate bar or can of soda — the age of the digitally wired vending machine is upon us