Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 790 Wed. August 16, 2006  
   
Business


Nokia may speed up Apple's entry into cellphone business


Mobile telephone giant Nokia's arrival in the music downloading business is bad news for Apple Computer, which may force the iPod maker to engineer a new "iPhone" to fend off the threat, experts believe.

Finland's Nokia, which controls about a third of the global cellular phone market, announced last week it was buying the digital music site Loudeye, a US firm which is active in Europe through its affiliate OD2.

Nokia, which already produces music-playing phones, believes the acquisition will "offer consumers a comprehensive mobile music experience, including devices, applications and the ability to purchase digital music."

The announcement came with Apple under fire from several European governments for monopolizing its proprietary technology to prevent iPods from downloading songs on sites other than iTunes.

"First they (Apple) get hammered by the French legislative machinery," said Mark Mulligan of Jupiter Research, "then the Nordics get narky."

"Next Microsoft say that they are deploying their own 'broken arrow' option and planning to take on Apple head on, essentially bypassing existing partners. And finally along come Nokia with their two-pronged attack."

Mulligon wrote in his blog that "there's no getting away from the fact that it's been a tough old couple of months for Apple."

The OD2 platform has been a pioneer in legal downloading. Co-founded in 1999 by British musician Peter Gabriel, it was bought in 2004 by Loudeye and today boasts support for 60 music purchase sites, including ones controlled by Microsoft in 13 European countries.