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Wed, Feb 16, 2005 - Page 12 News List

Nokia, Microsoft bury hatchet with music deal

NY TIMES NEWS SERVICE , CANNES, FRANCE

Nokia and Microsoft, which have a history as rivals, have decided to work together when it comes to mobile music.

Nokia, the leading cellphone manufacturer and a longtime Microsoft competitor in mobile phone software, said on Monday that it had agreed to use Microsoft's music formats on its handsets.

And in another advance for mobile music, Sony Ericsson Mobile Communications said it would make Sony Walkman-brand cellphones that would work with customers' digital music collections on their personal computers, as well as connect with music downloading services.

The companies made their announcements at the 3GSMWorld Congress, a cellphone trade show. They forecast a huge increase in the number of people using their cellphones to listen to music, especially with the growth of faster, or third-generation, cellphones.

At the moment, digital music is largely carried on portable players that are intended strictly for music, like the iPod made by Apple Computer. But hardware, software, music and phone companies agree that there is a mass market -- particularly among young people -- for music on demand that is sent over the air to cellphones.

The bandwidth of high-speed networks "will make mobile music work for the consumer," Miles Flint, Sony Ericsson's president, said.

The Windows Media Player, the program Nokia is licensing for its phones, is already a leading software program for listening to music on personal computers.

Until now, Nokia has been using an internally developed program or music software made by RealNetworks.

"This is a big shift by Nokia," said Ben Wood, telecommunications analyst at Gartner. "Nokia is conceding they can't do everything themselves."

Nokia and Microsoft use rival software for the operating systems that run cellphones. They have been on opposite sides in other areas, notably the European Commission antitrust case against Microsoft last year over sales of its operating system.

Amir Majidimehr, corporate vice president of Windows Digital Media, said Nokia and Microsoft had begun discussions on the mobile music deal about four months ago.

Nokia said the cooperation had come out of long-term work by both companies on industry forums to widen the use of open standards.

Anssi Vanjoki, Nokia executive vice president for multimedia, said the agreement on music software could lead to future partnerships.

Nokia also said that it had agreed to license Microsoft's e-mail synchronization system, called ActiveSync, to permit its business customers to use their Windows e-mail software on the road from their phones.

Financial terms of the deals were not disclosed.

For Sony Ericsson, a joint venture based in London, the decision to make Walkman phones was less surprising, said Wood, the Gartner analyst.

"It's a logical progression for Sony," he said.

Sony Ericsson, a leading manufacturer in Europe but a laggard in North America, expects to show the first Walkman phones in March.

They will be compatible with the Sony Connect download service, as well as others, Flint, the Sony Ericsson president, said.

Nokia, Microsoft and Sony Ericsson are among those trying to horn in on Apple's success with the iPod, which works with Apple's iTunes software. A Motorola cellphone with iTunes is planned for the spring.

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