Archive for April 2008

 
 

Nokia’s “Comes With Music”, Comes With A High Price

As Nokia (NYSE: NOK) prepares to launch one of the more innovative ways to sell music on a mobile phone—by including free and unlimited downloads for a year—the company will pay for it dearly, reports The Register. Rumors had been circulating that the handset manufacturer would be paying up to $35 a handset to Universal, which was the first to sign up when Nokia launched the “Comes With Music” initiative last December. Since then, Sony (NYSE: SNE) BMG has joined. The Register reports today that Nokia is paying a high price to be innovative. It supposedly will be paying the wholesale per-unit rate for downloads over a certain ceiling (believed to be 35 songs per user). The article doesn’t say what that wholesale rate it is, but if the retail is 99 cents, we are talking a lot of money potentially if users actually embrace the idea and download freely.

It’s a risky move, and if the report is correct, it looks as if Nokia doesn’t know how to handle it. Apparently, Ed Averdieck, formerly Managing Director of Nokia Music, has left the company and Tommi Mustonen, former head of Nokia Multimedia, has been given a “punishment that fits the crime”, which means he must negotiate the deals with labels personally.

Recently, Nokia rejected the pricing reports that it was paying up to $35 a handset, telling IDG that it “is not true. We are not paying that amount to any record label.” But it also appears the company was replying to reports that the fee would be paid for every handset, which is not the case. The company has repeatedly declined to provide any specifics.

Of course if the Register is correct, there could always be another contingency, like volume discounts, or on a limited number of handsets that wouldn’t make it so dire. At CTIA, where Tero Ojanpera, Nokia’s EVP of entertainment and communities spoke, he said Comes With Music is a business for Nokia, it’s not about selling more devices. “It has to be sustainable,” he said. “There has to be money to be shared, and we will share with the partners involved.”

Skype Launches Beta Mobile Client

Skype has launched a beta version of a mobile thin client. The application is available worldwide and includes chat, group chat, presence (seeing when your contacts are online), and receiving calls from Skype users, and through SkypeIn. Skype-to-Skype and SkypeOut calls are only available in Rio de Janeiro, Denmark, Estonia, Finland, Poland, Sweden and the UK. An unlimited data plan is recommended—although the service works over standard mobile voice networks connections for the first and/or last legs of Skype, SkypeOut and SkypeIn calls—and over the internet for the rest. Presumably you’ll be paying standard carrier rates for the voice calls, but it should be a local mobile call rather than an international one. [release]

8GB iPhone Goes To End Of Life In UK

O2 will stop selling the 8GB iPhone, according to an internal memo reported by Engadget. The memo reportedly reads: “Due to the highly successful sales of the Apple (NSDQ: AAPL) 8GB I-Phone [sic], supply chain have today run out of stock & will not be replenishing stock of this product as it has now gone to end of life.” Based on the assumption that O2 hasn’t tired of its deal with Apple, this means the next version of the iPhone (3G, greater storage, whatever it may turn out to be) should be appearing in the UK soon. This comes pretty quickly after O2 cut the price by $200.

Analysts are predicting a June 9th launch date for the 3G iPhone, which will correspond with Apple CEO Steve Jobs’ keynote at the company’s Worldwide Developers Conference reports IDG. The article notes that “the iPhone shortage is consistent with Apple’s “tendency to wind down inventory ahead of an update”.