Nokia, the world’s largest mobile phone maker, is planning to compete head-to-head with Apple Computer for control of the multi-billion dollar global market for digital music.

The Finnish company will in 2007 set up a rival to Apple’s iTunes online music store and also hopes its music-enabled phones will eventually depose Apple’s iconic iPod digital music player.

The new service, as yet unnamed, could pose a threat to Apple’s dominance of the multi-billion dollar online music industry, which it built following the 2001 launch of iTunes and the iPod.

“We want to be a global leader in mobile music experiences, and if that means operating in areas where Apple is, then so be it,” Anssi Vanjoki, executive vice-president of Nokia Multimedia, told the Financial Times.

Nokia is already the world’s largest maker and seller of digital music phones, having sold 45m last year, and is forecasting sales of 80m this year. Apple sold about 35m iPods last year.

The new service will allow consumers to purchase music from an individually branded internet site, download it to their mobile phone and pay for it on their phone bill.

It will be possible to play downloaded songs on all digital music players, unlike songs downloaded from iTunes, which can only be played on iPods or computers with iTunes software.

The news of the proposed launch comes as Norway, Denmark and Sweden are challenging Apple to allow songs downloaded from iTunes to be played on any digital music player.

While further details of the planned service were unavailable, Nokia on Tuesday announced the proposed acquisition of Loudeye, a US digital music distributor, for $60m.

Loudeye’s name will be dropped and will provide the platform for Nokia’s digital music offering. Loudeye has a current library of 1.6m music tracks.

Nokia’s move reflects the convergence of services on mobile handsets – a development that could make the single-function iPod anachronistic.

Investors have been awaiting updates to Apple’s iPod music player line, which was last refreshed in February when the company unveiled a 1 gigabyte iPod nano.

Apple’s shares have come under pressure this year amid concerns that a lack of new models could hit iPod sales, which account for about 40 per cent of the company’s revenues.

Apple could not be reached for comment on Tuesday.

Copyright The Financial Times Limited 2023. All rights reserved.
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