Cell phone industry bets big on music

updated 8:01 p.m. ET Feb. 14, 2005

CANNES, France - With a covetous eye on the success of portable music players, mobile phone makers are going after would-be iPod buyers by building high-quality players into their handsets.

Sony Ericsson announced Monday it would soon market music-player mobiles under its parent’s Walkman brand, drawing on the music catalogue of a sister company, Sony BMG, the world’s No. 2 record company.

And Nokia Corp., the world’s leading phone maker, announced an alliance with Microsoft Corp. to allow mobile subscribers to load music from a PC onto their phones — much the way that a digital music player works.

Unlike owners of dedicated MP3 players, Nokia users will also be able to download tracks directly onto their handsets through the wireless phone network and transfer them to computer for storage or burning onto a CD.

At a news conference on the first day of the 3GSM World Congress, a major mobile industry gathering on the French Riviera, Nokia also unveiled a new “3G” phone with an integrated music player and high-quality stereo output.

“Music is the next big thing in mobile multimedia,” said Anssi Vanjoki, head of Nokia’s multimedia division.

Mobile phone makers and networks are looking for ways to boost their revenue given difficulties finding new customers in saturated industrialized markets and even in some developing countries.

Motorola in deal with Net phone firm
Free voice calls over the Internet pose a further threat to revenues, forcing mobile operators to look to entertainment and data services for their future profitability. Such calls could soon be possible with mobiles: Motorola Inc. and Internet phone company Skype Technologies SA have just teamed up to explore that possibility.

With high-speed 3G networks now widespread, companies like Nokia hope demand for pricier, more sophisticated phones and airtime will be spurred by new features from wireless gaming and instant messaging to pay-TV and remote banking services.

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