Nokia Delays U.S. Music Service

The move could be another blow for the world's largest cell phone maker goal as it tries to gain traction in the United States.
Nokia said its Comes With Music service would be delayed and not hit the U.S. market until 2010.

A Nokia spokesperson confirmed the delay after a report appeared first appeared in Forbes, but the world's largest cell phone maker did not elaborate on the cause. The music service enables users to get unlimited copy-protected downloads to their phones and PCs for about 18 months, and it is currently available in 10 countries around the world, including the United Kingdom, Brazil, India, Singapore, and other markets.

One reason for the delay may be due to negotiations with mobile operators, as Comes With Music does add additional costs to the handset. Carrier deals could be critical because AT&T, Sprint Nextel, T-Mobile, and Verizon Wireless can provide heavy subsidies for these devices, which could be key drivers of mass adoption.

The service may be a hard sell for the mobile operators though, because many already offer their own way for users to browse, buy, and download music tracks. Nokia already offers revenue-sharing agreements with carriers, but it may have to increase this to solidify deals.

Additionally, studies suggest the U.S. market may not be ripe for mobile music, as only 10% of U.S. cell phone users listen to music on their cell phones, according to data from Forrester Research. The Comes With Music service has been extremely popular in emerging markets, but it has not been as successful in more developed markets like Western Europe.

While Nokia dominates the global mobile market, it is trounced in the United States by the likes of Apple and Research In Motion. The company is trying to up its U.S. market share by bringing out new services like Comes With Music, as well as offering devices like the E71 and Surge at aggressive price points.

Most companies are just starting the hard work of mobilizing workforces by bringing the software they use to smartphones. InformationWeek analyzed this issue in an independent report, and it can be downloaded here (registration required).

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