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Nokia Announces Plans to Take on iTunes

Tuesday, August 8th, 2006 at 3:10 PM - by

Cell phone maker Nokia will launch its own online music store next year. The company will use digital music distributor Loudeye, which Nokia said it will acquire for US$60 million, as the platform for it, according to the Financial Times. Loudeye has a library of 1.6 million tracks. Nokia won't retain the name.

"We want to be a global leader in mobile music experiences, and if that means operating in areas where Apple is, then so be it," Anssi Vanjoki, executive vice-president of Nokia Multimedia, told the Web site. His company is the number one maker of cell phones that play music, with 45 million sold last year and 80 million forecast for this year. The service will let consumers buy music, download it to their phones, and pay for it on their bills.

Apple was unavailable for comment.

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A guest said: (hide)

Tue Aug 08, 2006 3:26 pm

Obvious question: Why? Don't they know how expensive it and investment intensive competing at that level is?

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A guest said: (hide)

Tue Aug 08, 2006 3:51 pm

Smart move by Nokia. Huge userbase, larger then M$FT.

With every phone purchased one will get $10 worth of songs for free to try out the service.

Will probably work only with Nokia phones and the service will not need to make a profit as revenues will come from handsets sales.

Enables Nokia to differentiate themselves vs. SonyEricsson, Samsug and Motorola and NOT necessery compete with iTunes.

They already have a large business in Europe selling ring-tones which did so well that providers complained about it.

Perhaps also preparing for competition from iPhone.......

Jack

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A guest said: (hide)

Tue Aug 08, 2006 3:53 pm

I think Nokia is the one company that could compete in this marketplace. They make excellent easy to use phones (unfortunately many of them are ugly). their software is very good as well.

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A guest said: (hide)

Tue Aug 08, 2006 3:58 pm

Guest wrote:
Obvious question: Why? Don't they know how expensive it and investment intensive competing at that level is?

Nokia is a smart company wih deep pockets (unlike Napster) and knows it has no choice but to get in on the next wave: cell phone and MP3 player integration. And I wouldn't be surprised them being a little worried about the upcoming iPhone. (I myself can't wait for the last.) So I think Nokia is just being forward-thinking, protecting their turf. Will they succede? Both Apple and Nokia have to play catch-up: Apple in the cell phone business, Nokia in the MP3 business. Both have sizeable cash reserves and can take a little beating. Both will do well, but Apple will do much better.

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JulesLt said:

member since 06 Jul 2005 with 136 posts, unranked, send him a message or view his profile

Tue Aug 08, 2006 5:29 pm

Surely they have the same problem as Apple - it is the carriers who have the keys to the network. It is the carriers who have successfully resisted handsets that can play any MP3 in your memory as a ringtone. Most of the carriers are multi-handset too - unless Nokia are willing to move into providing the music service to other handset players, which could be a very smart move.

(I also wonder how Scandinavian legislation would affect this - could Nokia really create a store locked to Nokia phone while their own government pursues Apple?)

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KitsuneStudios said:

member since 25 Oct 2001 with 2490 posts, unranked, send him a message or view his profile

Tue Aug 08, 2006 9:37 pm

*cough*NGage*hack*

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked, send him a message or view his profile

Wed Aug 09, 2006 11:07 am

Guest wrote:
...

Will probably work only with Nokia phones and the service will not need to make a profit as revenues will come from handsets sales.

Enables Nokia to differentiate themselves vs. SonyEricsson, Samsug and Motorola and NOT necessery compete with iTunes.

...

Jack
How would this not be competition with iTunes? What, are people going to buy large amount of music from two totally different and incompatible services that can't be shared between devices? Not likely. One or the other. Hence, competition.

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A guest said: (hide)

Thu Aug 10, 2006 2:29 pm

KitsuneStudios wrote:
*cough*NGage*hack*

Exactly. Nokia tried to 'take on' Nintendo and Sony in the handheld gaming space, and got their head handed to them.

I wish Nokia well, but their success in the downloadable music arena is far from assured.

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