Nokia will start offering unlimited music through mobile phones in Britain on Oct. 16, the Finnish company said on Thursday, as it seeks to muscle in on a market dominated by Apple’s iPod.
The new service, named “comes with music,” allows people owning a special device to download unlimited music for free through their mobile telephone or computer for up to 18 months — after which they can also keep the music.
“It’s about changing the way we consume music,” said Tero Ojanpero, executive vice president and head of entertainment and communities business at Nokia, the world’s leading mobile phone maker.
Britain will be first to offer the service through the Carphone Warehouse dealer. It will be initially available on 5310 Xpress Music phones, which cost £129.95 (US$229), but other phones will then be added.
The service will then be rolled out to ten other countries including France, Sweden, Spain and Singapore where the online Nokia Music Store is available.
The store is Nokia’s answer to the iTunes store from Apple, and it has signed deals with Universal Music, Sony BMG, EMI, Warner and a host of independent labels to give customers a wide range of music from which to choose.
Sony-Ericsson said on Wednesday that it would also be launching an unlimited music download service by the end of the year, but it would be part of a mobile phone package, PlayNowTM, and customers could only keep up to 300 songs. South Korea’s LG Electronics also plans a service similar to Nokia’s.
Analysts and music industry players said Nokia’s offering could bring free music to millions of consumers and change the music industry significantly.
“Apple’s days of dominant digital music retailer outside the United States are numbered, if they don’t do anything radical,” said Rob Wells, head of Universal’s digital music business.
Apple controls slightly more than half of global digital music sales through its iTunes store.
“In a market where price and selection are so much more important than brand to consumers, Apple cannot count on retaining users when competing with an offering which seems free to the end user,” Strategy Analytics’ David MacQueen said in a research report.
In another challenge to Apple’s iPhone, Nokia said it would launch its first touch-screen phone in Taiwan, Spain, Russia, Indonesia, India, Hong Kong and the United Arab Emirates later this year, and France and Britain next year.
Nokia said at an analyst and media event in London it would start selling its first touch-screen phone 5800 Xpressmusic shortly, pricing it at US$395 excluding subsidies and taxes, which it said was roughly half the price of the other main touch-screen phones on the market.
The price means consumers on many large markets will get the phone for free from operators when signing up for contract.
“The price and positioning of the product may result in substantial demand and will undoubtedly put some pressure on Apple,” said Ben Wood, research head at CCS Insight.
Nokia has acknowledged the impact Apple has made on the industry with its iPhone over the past year, saying the Cupertino, California-based computer and consumer electronics company had done the mobile phone industry “a big favor.”
“We have a new, credible competitor in this business,” Nokia chief executive Olli-Pekka Kallasvuo told the Churchill Club on Wednesday, a speakers’ forum for Silicon Valley civic leaders. “Of course we need to be able to respond to any competitor and we will.”
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