Nokia's Comes with Music--an operator turnoff

Paul Rasmussen — Fri, 03 Oct 2008 13:19:48 -0400

Nokia's glitzy launch in London of its Comes with Music service will have pleased music lovers and the gadget press alike, but UK mobile operators have expressed their displeasure by vowing not to sell the service over their networks.

While these operators will closely monitor this free music download service, their refusal to cooperate with Nokia stems from two, significant issues. Firstly, Nokia is insisting upon a profit-sharing deal albeit that operators can see little margin in selling the handset. Secondly, the operators will be saddled with much increased network traffic caused by the unlimited downloads associated with the service. The fear is that this could run into several Gigabytes per month per handset, which could cripple operators' existing data networks.

Insisting that the situation was not all gloom, Nokia claims to be negotiating with several operators in the hope it can sign several deals in time for Christmas. However, given the majority of the larger European operators already have, or are planning, a music download service, Nokia's Comes with Music can only be seen as a threat. The market research firm CCS Insight said it expected some operators to participate in the new service, but only if it proves popular and draws in new subscribers.

This resistance by UK operators could well be echoed by their counterparts in Europe and the US. Nokia's Ovi service, an umbrella concept for mobile Internet, has also experienced pushback from the operator community not wanting the handset giant to cream off revenues they strongly maintain belong to them.

However, a recent study by market researcher TNS Technology revealed that people aged 16 to 64 wanted to download 64 music tracks a month--which, on a yearly basis, equates to over £600, making the Comes with Music service at £130 look more of an attractive proposition.

For more on this story:
- go to IT Proportal

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Nokia looks to services for future revenues

Paul Rasmussen — Fri, 18 Jul 2008 12:42:48 -0400

Having presented a satisfactory set of quarterly results, of perhaps more interest was the growth in the company's services revenues. Buried deep within the results, Nokia confirmed that revenues from the services and software division reached €119 million in 2Q08, up from €84 million in the previous quarter. While these numbers are miniscule when measured against Nokia's handset business--sales rose four per cent to €13.2 billion in the quarter, it is clear that the company's services strategy is beginning to pay off. Products falling under Nokia's Ovi software and services umbrella brand include the Nokia Music Store, Nokia Maps, N-Gage and the Comes With Music initiative. The latter, which is supported by Sony BMG, Universal Music and Warner Music, will offer owners of selected Nseries handsets free and unlimited music downloads for a year.

However, the much hyped Comes With Music service has no launch date other than late 2008. Nokia Maps, meanwhile, was downloaded 406,000 times during the quarter. Geoff Blaber, an analyst with CCS Insight, said Nokia's presence in emerging markets meant it was well insulated from any European economic downturn. "But the margins on hardware are declining. It will be hard to gain more handset market share, so the move into services will be key."

For more on this story:
- go to Mobile Entertainment

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