Nokia finds it easier to sell handsets than services – for now

Posted by Paul Lambert Tuesday, October 14th, 2008

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Telefonica Moviles has become the first carrier to announce that it will be offering Nokia’s 5800 XpressMusic phone, but it looks as if it will be doing so without the handset maker’s Comes With Music service.

The move will be a blow to Nokia because the Finnish vendor is trying to develop its service offerings in a bid to add incremental revenues to those already generated from selling handsets.

In a press release announcing that the 5800, Nokia’s first touch-screen device, will go on sale in Telefonica’s shops in Spain at the beginning of December, the carrier makes no mention of Comes With Music – the unlimited-music-download service for which the 5800 has been earmarked as a flagship device.

“We have no agreement for the time being with Nokia for either its Music Store or Comes With Music,” Jorge Aguilar Garcia, head of music at Telefonica Moviles Spain, told Informa Telecoms & Media.

Aguilar has previously told Informa that Telefonica eyed with “suspicion” Nokia’s bid to become a digital-music distributor and had not decided whether it would allow tracks downloaded over its network from Nokia’s Music Store to be billed through it.

Meanwhile, Hutchison Whampoa unit 3 UK will reportedly offer the Nokia N95 Comes With Music handset, which offers unlimited music. 3 UK could not be reached to confirm or deny the reports.

Comes With Music will reportedly be launched in the UK Oct. 16 via a prepaid 5310 XpressMusic, while a monthly contract N95 will be sold by 3 UK starting in November.

Comes With Music grants users unlimited access to tracks they can keep after their subscription to the service ends. The Nokia 5310 XpressMusic Comes With Music edition is expected to cost £129.95 (US$230). Comes With Music will be available across a range of Nokia devices, including the 5800 XpressMusic, the N95 8GB and the 5310 XpressMusic.

Nokia has also announced EMI Music as the latest major label to support Comes With Music, adding to the list of independents and major labels Nokia had already signed
up.