Nokia Buys Loudeye to Boost Mobile Music Business

Strategic Insights -

Nokia, the world's biggest maker of cellular phones, has agreed to buy Loudeye, a digital music distributor, for $60 million. The deal is aimed at creating a "comprehensive mobile music experience" that begins next year. Nokia sold 15 million phones capable of playing music in the second quarter, making it the biggest seller of portable music devices, ahead of Apple, which sold about 8 million iPods.

Key Takeaways:

  • Nokia acquires Loudeye for $60 million to create a mobile music experience.
  • Loudeye runs music services for over 60 partners, including Microsoft's MSN web portal and Oxfam.
  • Nokia sold 15 million phones capable of playing music in the second quarter, surpassing Apple's 8 million iPod sales.
  • The acquisition raises questions about whether Nokia will offer a digital music service under its own brand name.
  • Analysts say that getting mobile phone operators on board is crucial for mobile music adoption.
  • The popularity of the iPod has held back the adoption of phones that can download music wirelessly.
  • Loudeye's OD2 division, founded by musician Peter Gabriel, is at the center of the acquisition.

Statistics:

  • Nokia sold 15 million phones capable of playing music in the second quarter.
  • Apple sold about 8 million iPods in the second quarter.
  • Loudeye runs music services for over 60 partners.
  • Nokia's acquisition of Loudeye is valued at $60 million.
  • Loudeye's OD2 division was founded 6 years ago by musician Peter Gabriel.

Sources:

  • Financial Times: "Nokia buys Loudeye to boost mobile music"
  • Reuters: "Nokia to buy Loudeye in $60 million music push"
  • The Verge: "Nokia acquires Loudeye, a potential iTunes killer"