Music Download Business Gets More Crowded


Nokia is talking about starting a music download business. It can now compete with Apple, RealNetworks and Sandisk, Microsoft, and a pack of smaller players like Napster. The huge cell phone company is cutting its forecast for margins next year from 17% to 15%, and it needs to find new sources of revenue to take up the slack.

Nokia is the world’s largest cellphone company, ahead of rivals like Samsung and Motorola. But, it is forecasting that global handset sales growth will drop to 10% next year.

The strength of a possible music download business from Nokia is that it sold 88 million handsets last quarter alone.It has 35% of the global handset market. Apple’s iPod has a total distribution of about 70 million units.

However, Apple’s lock on the music device business is powerful, as rivals like the Microsoft Zune are finding out this holiday season.

Perhaps Nokia want to find another path to growth.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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