mocoNews.net - Nokia Comes With Music Sales 'OK, But Not Earth Shattering'

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Tricia Duryee

mocoNews.net
Friday, January 2, 2009; 4:59 PM

In an interview with the Financial Times, Olli-Pekka Kallasvuo, Nokia's CEO, said there is "so much consumer interest" in the company's Comes With Music service, which provides unlimited PC music downloads from the four major record labels. The story was primarily about how Nokia (NYSE: NOK) believes it is better positioned to deal with the economic downturn than its competitors, for which Nokia provided two main reasons: Kallasvuo said as people are forced to become more frugal, they may have to downgrade from a higher-end device to a lower to mid-range phone?and Nokia has the breadth in its portfolio to accommodate that trend, and second, it is diversifying into other businesses, like maps and games, and Comes With Music.

The Financial Times points out that it may be difficult to sell add-on services when times are tough, and quotes a person familiar with Nokia's Comes With Music service in the UK, as saying that initial sales had been "OK, but not earth shattering." The person said consumers are reluctant to pay extra for a mobile with the service ? sold through Carphone Warehouse, the mobile phone retailer, and 3, the smaller mobile operator ? when they could get the music for free on the internet.