Nokia takes on whole industry with music play

Finnish handset vendor Nokia threw down the gauntlet to the entire mobile industry on Thursday night, taking on operators and handset manufacturers alike with its latest salvo of releases.

There was a triple whammy of announcements from the world’s biggest handset maker – the launch of the long awaited Comes with Music platform; the unveiling of the flashy 5800 touchscreen gadget; and the introduction of the latest version of the Symbian platform, S60 5th Edition.

Comes with Music is interesting in that it’s the first time Nokia has really pitched its own stand alone service. Consumers buying gadgets from the Comes with Music portfolio get one year of unlimited access to the entire Nokia Music Store catalogue, with the added bonus that they can keep all the music that they have downloaded after their subscription expires. Although Nomura analyst Richard Windsor points out that the tracks remain locked to Windows DRM, which restricts transfer to many other devices, including iPods.

The platform is supported by the majority of big name labels including EMI, Universal, Sony BMG, Warner, The Orchard, Beggars Group, IODA, the Ministry of Sound, PIAS and Pinnacle.

The UK will be the first market to offer Comes with Music from October 16. But tellingly, the only confirmed place it will be sold is high street retailer the Carphone Warehouse. Given that Nokia’s offering competes directly with similar initiatives from all the major UK operators, it remains to be seen whether the carriers will sell it at all.

On the back of Nokia’s Ovi push, which is already stepping on the operators’ toes, it could be that Comes with Music is just a step too far.

Which brings us to the 5800 XpressMusic, Nokia’s latest assault on the handset space, and the gadget that is already been called an “iPhone killer”.

The 5800 boasts a full VGA, 3.2″ widescreen display, with a 16 by 9 aspect ratio and 30 frames-per-second playback. Taking advantage of touchscreen technology, Nokia has streamlined the user interface to make use of commonly accessed applications and contacts, as well as the Ovi platform and of course the Nokia Music Store.

Under the hood there is HSDPA connectivity, GPS, 8GB memory, a 3.5mm jack and surround sound stereo speakers as well as a 3.2 megapixel camera. The web browser notably supports Flash Lite 3.

Symbian S60 5th Edition, was the focus of the third announcement, and the 5800 is the first device based on the platform. The most notable new features are the introduction of touch and full support for tactile feedback. Enhanced display resolution support with a widescreen mode and a more engaging visual experience.

Comes With Music will be available across a range of devices, including the new 5800, as well as the N95 8GB and 5310. The 5310 XpressMusic Comes with Music edition is expected to cost Eur162. The 5800 will be priced at Eur279 before subsidies.

Nomura’s Richard Windsor said that at two thirds of the price of the iPhone, the 5800 is a reasonable first attempt by Nokia to take on this market. “The screen and the speakers are best in class but the UI and data input systems need some polish to be as slick and intuitive [as the iPhone],” he said. Despite this the user does get quite a lot of bang for the buck and Nomura expects the device to be popular.

IDC senior analyst, Jonathan Arber added that that there was a suspicion that Nokia is launching Comes with Music as a loss leader to drive device sales, a point that was denied by Liz Schimel, Nokia’s global head of music, who said that Nokia will be making a margin on the licence element of the price. “In any case we believe that Comes with Music is more about Nokia pushing itself into the consumer market with a headline-grabbing service, and thus initiating a rapid spot of brand transformation.”

The digital music market had a lucky escape in the last 24 hours, after Apple managed to show the US copyright authorities who’s boss. On Thursday, the Copyright Royalty Board declined a request from the National Music Publishers Association to increase royalties on songs purchased from digital music stores like iTunes from 9 cents to 15 cents. Such a move would have killed Apple’s margin on songs sold, and an Apple memo which surfaced this week revealed that Apple would likely close the music store if royalty rates were increased. A threat which might have swung the decision for the Copyright board.