Fri, Aug 31, 2007 page10

• Nokia to launch online store for music this year

  • NY TIMES NEWS SERVICE
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  At the converted 19th-century fish market where Apple announced the European introduction of its iTunes music store three years ago, Nokia said on Wednesday that it would soon introduce its own digital music service, along with an easier-to-use Apple-style mobile interface and an Apple-style touchscreen handset.

  The Nokia Music Store, to open this year, will let users download songs from the Internet to their computers or directly to mobile phones over wireless networks, which Apple's recently released iPhone cannot do.

  Analysts said the move heightened the rivalry between Nokia and Apple at the high end of the mobile phone business.

  "It was obviously going straight at Apple," said Seamus McAteer, senior analyst at M:Metrics, a research firm.

  While Nokia executives chose suits and ties rather than the black mock turtlenecks and blue jeans favored by Steve Jobs, Apple's chief executive, they acknowledged that Nokia was not above imitating its rival.

  "I don't know what is copying and what is original but if there is something good in the world, we copy it with pride," said Anssi Vanjoki, head of the Nokia multimedia division, which makes the company's high-end handsets, when asked about similarities between the iPhone, iTunes and the new devices and services announced by Nokia.

  In offering direct downloads, the Nokia Music Store goes beyond iTunes, which requires users to download songs to their personal computers before transferring them to an iPod music player or an iPhone.

  The Nokia store, which the company said would be made available first in important European markets, could put pressure on Apple to develop a similar service, analysts said.

  The music store also potentially puts Nokia into conflict with operators of mobile networks, which in many cases have developed music services of their own.

  But analysts say that outside of Asia, mobile phone services like music have been relatively slow to take off, despite the tens of billions of dollars that network operators have poured into the technology to enable them.

  "Now Nokia is saying, `You guys had your chance to run music stores, or whatever, and it didn't work, so now we're going to give consumers what they want,'" said Paul Jackson, an analyst at Forrester Research.

  Nokia also introduced several phone models on Wednesday with increased storage capacity for music and other media content and announced that it would introduce its touchscreen phone next year.

  While Nokia clearly has one eye on Apple, analysts said network operators might more directly feel its move into services, and that could affect relationships with device manufacturers.

  Orange, which is part of France Telecom, for example, has a partnership with the phone maker Sony Ericsson, under which its Walkman-branded phones send users to the Orange music store at the touch of a button.

  Apple, meanwhile, has signed an exclusive iPhone distribution agreement with AT&T in the US and is reportedly pursuing similar arrangements for the pending introduction of the phone in Europe.

  Yet Nokia has a strong negotiating position, analysts said, because it sells about 400 million phones a year -- more than one-third of the global market.

  This means that the network operators might not be able to drop a popular handset from their lineups.
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