Strategy Analytics: Can Nokia Challenge Apple's Digital Music Dominance?

Business Wire, Sept 18, 2008

"Comes with Music" Could Shake Up the Music Industry and Threaten Apple's Supremacy

BOSTON -- The Strategy Analytics Wireless Media Strategies service report, "Can Nokia Challenge Apple's Digital Music Dominance," examines Nokia's potentially game-changing service, "Comes with Music," which bundles music access with mobile phones. What impact could it have, and how will it affect other music stores?

The major drivers for mobile music are in place, but service adoption has not been as strong as many predicted. Strategy Analytics survey data shows that although 83% of respondents use their phones to play music, only 6% of music tracks on devices are from mobile stores, a clear disappointment to mobile operators.

"Strategy Analytics data shows that price and selection are the most important factors in a customer's choice of music store, and that brand loyalty is extremely low. In this environment, even Apple cannot count on retaining users when competing with an offer that seems free to the end user," said David MacQueen, Director of the Strategy Analytics Wireless Media Strategies service and author of the report. "Comes with Music and other bundled services, should they succeed, offer a lifeline to the music labels which have seen revenues decline sharply in the digital age," he added.

David Kerr, Vice President at Strategy Analytics, noted, "'Comes with Music' is Nokia's biggest step so far in its transition from a hardware company to a software and services strategy. There are some key unanswered questions and challenges to overcome, but our survey data shows clear latent demand for such an offering. 84% of respondents were willing to pay for a service such as 'Comes with Music'."

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