Nokia music phone price to go down

The company does not foresee a similar reduction in prices for its N-series phones.

Nokia, the leading mobile handset manufacturer in India that sold 146 million MP3-enabled phones globally, is expected to slash the prices of its music phones in India in the next few months. The company's music phone series, XpressMusic, which at present retails at Rs 5,000 and more, is expected to come down to Rs 3,000. The company does not foresee a similar reduction in prices for its N-series phones, which are high-end multimedia and music-capable devices.


Raghuvesh Sarup, head of GTM (programme portfolio and categories), Nokia India, said, "We are the largest supplier of music devices in the world. In our new identity as an Internet services company, Nokia will be bringing several MP3-based applications and music mixers that will be available for downloads over mobile and online." Nokia, along with AR Rahman and Big Music, has already launched Nokia XpressMusic mixer application, which is an online music mixer to remix two tracks from Rahman's forthcoming film Ada...a way of life.

Sarup reasoned that the move to lure customers to its music phones with reasonable price points is part of Nokia's strategy to ready consumers for the launch of Nokia MusicStore — its online music distribution service that will have more than two million albums — later this year.

Mobile music downloads, currently valued at Rs 160-180 crore in the domestic market, is set to see 40 per cent CAGR growth with companies like Nokia pushing services through its in-built music applications on handsets.

Royalties worth Rs 50-60 crore were paid to the music industry in the past 18 months and value-added services — of which music with full song downloads, music videos and ringtones forms the bulk — are estimated to contribute 20-25 per cent to a service provider's revenues.

According to a PricewaterHouseCooper report, Indians seem to have purchased more music through mobile phones last year, and mobile music purchases are set to grow nine times more by 2009.

But TNS, a global market information and insight group, adds a note of warning: ൞ per cent of users now sideload music (transfer from PC or laptop) compared to just 16 per cent who download from the web/operator network." Using the phone as a music player does give device manufacturers like Nokia to open up an opportunity to increase consumer involvement with their products.

But for network operators and music rights owners, incremental revenue growth through downloading may be limited, adds the TNS report.

In the next 12 months, Nokia is expected to launch several XpressMusic phones at lower price points that would help the company build a user base.

Besides, this year the company is also betting big on phones supporting applications likes maps, music and games. "By year end, we should have 12 handsets from the existing six models that will come with built-in Nokia maps, and pricing of these global positioning applications are being worked out," said Sarup.

Analysts anticipate that in 2008‚ for the first time‚ the number of replacement purchases in emerging markets will exceed those of first-time buyers.

Nokia's move to lure with its music and entertainment download services rings sense as mobile music is expected to comprise up to 75 per cent of the Asian music sales by 2009, according to Music Sales data.

Courtesy:business-standard.com