MP3 online battle looms

Nokia has joined Microsoft in confirming plans to tackle Apple’s dominance of the digital music business.

  • E-Mail
By  Aaron Greenwood Published  September 3, 2006

Nokia has joined Microsoft in announcing plans to take on Apple for a major share of the lucrative digital music business. The company has confirmed plans to establish an online music service to rival Apple’s iTunes offering, following its acquisition last month of US digital music distributor Loudeye for US$60 million. The existing Loudeye online music service is expected to form the basis of the new Nokia offering. Loudeye currently maintains a database of around 1.6 million audio tracks. The new service will enable users to purchase and download music to their handsets wirelessly, with the charge being added to their phone bill. Unlike audio files downloaded using iTunes, Nokia’s service will enable users to play tracks on any portable digital music device. Nokia is the leading manufacturer of music-enabled mobile handsets, shipping 45 million units in 2005, compared to 35 million iPods during the same period. Nokia expects to sell around 80 million music-enabled handsets this year. Meanwhile, Microsoft has announced a deal with Toshiba, which will see the company manufacture it’s new iPod rival, the Zune media player, which is scheduled for release later this year. Confirming the deal, a Toshiba spokesperson said Zune would feature wireless networking capabilities, allowing users to share music and digital images without the need to connect the player to a personal computer. It will also enable users to stream music to up to four other devices, including other Zunes. The portable music player is expected to initially boast a 30GB hard drive, FM tuner and 3-inch screen, ensuring it is competitive with Apple’s all-conquering iPod range. Microsoft will also establish an online music portal to rival Apple’s iTunes service, but with additional and as-yet-unspecified features. Despite these commercial threats, analysts believe Apple could hit back hard with new iterations of its iPod and iTunes offerings in the next 12 months. Industry speculation suggests Apple is working to develop a wireless networking capability for its iPod range, in addition to shoring up content deals with major media organisations including Hollywood studios and news providers for its iTunes service. Furthermore, industry analyst ABI Research suggested iTunes had the potential to outstrip Apple’s formidable iPod business and may enable the company to enter the home audio and video markets ahead of its competitors. “The battle for portable devices has already been won by iPod (unless Microsoft’s strategy for its Zune platform succeeds) but in the home and mobile markets, the prize is still up for grabs. iTunes could be a ‘Trojan Horse’ through which Apple can enter the home market sooner than the competition,” claimed ABI Research research director Vamsi Sistla. Sistla suggested that key to this opportunity is consumers’ growing interest in digital media connectivity in the home. “I think we will soon see more line-powered consumer audio devices — high-end audio devices with AV receivers, and multi-room audio systems — adding support for iTunes to their current support for iPod,” he added.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code