Mobile Players Take On Apple iPhone With Flat-Rate Mobile Music Service

Major mobile phone players in Europe and Asia are pooling their resources to launch a low-cost, flat-rate music service called MusicStation, in a direct challenge to Apple's upcoming iPhone. The Financial Times reports that the service, which launches today, is being backed by Nokia, Sony Ericsson, Motorola, Samsung, 30 mobile phone operators, and all four major music labels -- Universal, Sony, EMI and Warner. Apple's U.S. iPhone launch is scheduled for June 29. The iPhone includes a built-in iPod, which will access Apple's online music store, iTunes. The MusicStation launch is timed to pre-empt the iPhone launch in Asia and Europe: "We were keen to jump through the finish line first. All European and Asian consumers will have access to MusicStation well before iPhone's arrival in those regions," said Rob Lewis, CEO of Omnifone, the company behind MusicStation. Mobile phone makers are pre-loading phones with MusicStation software; it's estimated 100 million pre-loaded phones (pictured) will ship over the next year, compared to Apple's stated goal of 10 million. Many of the phones will be mid-price-range, in contrast to iPhone's $499 price tag. Users will be charged a flat fee of €2.99/week for unlimited access to MusicStation's one-million-plus collection of songs. Singles on sites like iTunes are typically sold for about €1.50, and the industry estimates the average user buys six singles a year. According to the company's press release, the first MusicStation handsets arrived in Swedish stores today. Extensive rollouts in Europe, Asia-Pacific and Africa are imminent, but will only be announced on the day handsets arrive in retail outlets.

Sources: Press release, Financial Times
Commentary: The Street Gets Pre-Release Jitters On Apple's iPhone • Nokia's N95: The iPhone's European Competitor • Verizon May Counter iPhone With LG Prada
Stocks/ETFs to watch: Nokia Corp. (NOK), Sony Corp. (SNE), Telefonaktiebolaget LM Ericsson ADR (ERIC), Motorola Inc. (MOT), Apple Computer Inc. (AAPL)
Related: MusicStation website

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Comments

[Julian Ivan...:]

They just don't get it. People don't want to rent their music. They want to own it. Its personal to them. The studios are crazy for encouraging their customers to view music as a commodity with no inherent value rather than a valuable and personal possession. This will go the same way as every other similar service.
There are 500M iTunes users worldwide already, with 1M copies of iTunes being downloaded every day. The tracks people have in their iTunes library work with: PCs, Macs, iPods, and iPhones - and many other devices too.
The same will not be true for this service, which will likely be limited to playback on the phone only, or if you're "lucky," then some terrible music jukebox software that's bound to be PC only.
Doomed to failure, and all the more embarrassingly so for being backed by the world+mother.

2007 Jun 14 06:38 AM

[Hayweed:]

If buying costs 1.50 and users buy 6 songs a year that is 9.00 in revenue for the sales model

If renting costs 2.99/week * 52 weeks =155.48 per year to rent music.

Consumers may be dumb but does anyone think the idea of rent your music for 15 times what you spend buying it will work.

Plus can you load all your cd's onto the rental music phones?

2007 Jun 14 07:20 AM

[Tom B:]

Don't these idiots ever learn? Slapping a phone on top of a failed business model for delivering music hardly seems to be a fruitful direction.

2007 Jun 14 08:40 AM

[Lucmee:]

It costs me nothing to dump my already owned music into itunes and enjoy... And renting music is a non starter.

2007 Jun 14 12:41 PM

[charles656oio:]

The much anticipated Apple iPhone is scheduled to release on June 29th, less than two weeks from now. The expectations of the phone are still rolling high,

www.iphone-video-conve...

2007 Jun 19 03:38 AM