iTWire - Now iTunes under attack in Europe from Nokia

Now iTunes under attack in Europe from Nokia

By Stan Beer
Thursday, 30 August 2007 00:04

Apple, already smarting from a collaboration between music retailers such as Wal-Mart and record companies Universal and EMI undercutting iTunes prices, is now under attack in Europe from the world's largest cellphone maker Nokia launching a competitively priced online music store.

The Nokia Music Store, to be opened in Q3 2007, will offer 192kbps WMA DRM tracks for EUR 1.00 compared to Eur 0.99 for Apple's 128kbps DRM iTunes tracks. Perhaps more importantly, Nokia will enable users to download tracks directly to their phones and sync them to copies on their PCs or vice versa.

There is however a potential snag. Nokia must first nut out deals with the major carriers who have until now presented roadblocks to music downloads by forcing users to pay higher prices than PC downloads. Despite this, it is more than likely that Nokia has already had successful negotiations with major carriers given that it has confidently announced the new service.

According to Nokia, the first handsets to be compatible with the new service will be the Nokia N81 and Nokia N95 8GB. The launch of the Nokia Music Store in Europe presents an interesting contrast to the launch of iPhone in the US. One of the main enablers of an effective mobile music download service is the availability high speed mobile broadband networks and handsets. In Europe, 3G is now the standard, while in the US, 3G penetration is still relatively low.

If iPhone has a weakness, it is that the initial model is not 3G and is therefore not capable of direct music downloads. When Apple's iPod marketing director Greg Joswiak said earlier this year that iTunes should live on the PC not the iPhone he was obviously aware that the current model of iPhone was simply not capable of housing a mobile iTunes service given its limited bandwidth capabilities. However, with Nokia launching its service, Apple may have to consider launching an iTunes capable 3G iPhone when it goes into Europe at the end of the year.