Today, we got word that Nokia
Not long ago we learned that Apple
In the balance are the 1.5 billion cell-phone users imagined by the end of this year. In addition, digital music is a fledgling and successful market thus far. JupiterResearch recently projected that digital music sales will be $270 million in 2004, doubling in just one year and reaching $1.7 billion in 2009.
Nokia can hardly afford to ignore the opportunity in music. Its woes have been well documented over the last several months and were largely attributed to losing market share to competitors because of a product mix that didn't deliver some of the most popular features. One could argue that to miss a big one, like music could be, might turn out to be a fatal error.
Meanwhile, Nokia seems to be suffering supply problems with a product that has been hitting it off with U.K.-based cell-phone shoppers. (Interestingly, that model did include a radio feature.)
Today's alliance between Nokia and Loudeye at the very least pays lip service to the idea that Nokia can't afford to miss consumer hot spots for much longer, lest it lose even more of its mighty market share to rivals.
If there's anything Nokia might regret, it's not having secured the musical genius of Apple for its tuneful product. Losing that star power to Motorola smarts a little, and as things stand now, having iTunes on board will be a powerful draw, unless Apple's rivals have gobbled up some of its market share by this time next year.
Also, the press announcement didn't give a time frame where we could expect any products from the deal. With lack of details and time frame, it is of course too early to enthuse too much about Nokia's entry into the space.
Loudeye might have the most to gain, as it will receive a multimillion-dollar commitment from Nokia for development of the musical platform. (For more on the quiet promise of Loudeye, check out this recent Take from Fool Seth Jayson.) This deal may get it in on the ground floor of the next big wave in digital music.
Will music be a boon to Nokia? Or do you wish that it had secured a deal with Apple's iTunes? Talk to Fools about this and the many talking points on the Finnish company's future on the Nokia discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.
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