Nokia takes on Apple

Nokia is on a collision course with Apple's iTunes, following the company recent purchase of Loudeye, a company focused helping others distribute and sell digital music. A new report says that the $60 million purchase is the first step to a showdown, according to the report that says that the company may be seeking to go "after none other than the 800-pound gorilla of the digital music world." According to the report, Apple has sold 22.5 million iPod players in its fiscal year 2005 and could approach 50 million units by the end of 2006; however, Nokia sold over 265 million units in its most recent fiscal year, 40 million of which were capable of playing music. Although many music enthusiasts prefer an iPod, the distinction is blurring quickly as more and more phones gain larger storage capacity, a better interface, and more features.

With rumored discussions between Apple and other carries for over-the-air iTunes, Nokia is hoping its Loudeye purchase will help it sway wireless carriers as they turn to music download services, a $400 million market last year that is expected to take off and reach $14 billion by 2011, according to U.K.-based Juniper Research.

Nokia's response to iTunes

"Nokia already sells as many music phones as Apple sells iPods," says Albert Lin, an analyst with American Technology Research told Newsfactor. "And the market for music phones will be larger than the market for stand-alone music players. The bulk of music-playing devices sold is likely to be the cell phones."

The move has put Nokia on collision course with Apple. According to the report, the Loudeye acquisition gives Nokia a catalog of 1.6 million tracks Nokia has more content rights to local music globally than any other music distributor in the world -- including iTunes.

by MacNN Staff