Nokia to Enter the Music Business

Realizing that mobile and music are a good match–at least in the present–Nokia has announced plans to acquire music distributor Loudeye.

ZDNet reports:

Nokia said on Tuesday it had agreed to buy U.S.-based digital music distributor Loudeye for $60 million as the world’s largest handset maker aims for a bigger slice of a potentially lucrative market.
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Handset makers see digital music as one of the key drivers for selling more expensive new phones.

“Music is now the number one service for selling advanced mobile phones–it has been cameras, and in the future it might be television–but in 2006 music has become the service phone makers have been concentrating on,” said FIM Securities analyst Erik Sucksdorff.

Music and mobile phones are hitting the sweet spot in today’s consumer market. while other technologies are on the horizon–such as mobile television and perhaps even videoconferencing–Nokia is apparently learning from today’s iPod generation. It even has the right to claim the “largest manufacturer of digital music players” title.

Loudeye aggregates rights and content from major labels and hundreds of independent labels and currently offers licensed catalog and complete media for over 1.6 million tracks.
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Nokia said it had sold more than 15 million music-enabled phones in April to June, making it the world’s largest manufacturer of digital music players, and it aims to sell more than 80 million music devices this year.

Does this pose a challenge to the iPod+iTunes dominance? Perhaps not today, but having a convenient way to purchase music for use on mobile phones sure is a good marketing move for the number one mobile manufacturer.

Here’s the press release from loudeye.com.