Nokia will drop the ailing Comes with Music offering from the new version of its flagship X6 music phone, hoping a one-third cheaper price tag will boost sales of the model.
Nokia tried to boost its Comes with Music service, selling the X6 model only with the music package, but analysts said many telecoms operators -- key sales channel for handset vendors -- opposed the packaging.
Nokia will have unbundled Comes with Music with heavy heart. It's a cornerstone service for flagship products like the X6, but this move reflects operators' reluctance to offer it, said Ben Wood, head of research at CCS Insight.
Nokia unveiled Comes with Music in late 2008 in Britain -- seen as the acid test market for new mobile services in Europe -- but it has lacked operator support and has gained little traction.
This was an expected move -- in our view, the early demand for the bundled X6 has been soft, said analyst Tero Kuittinen from MKM Partners.
The lack of confidence in Comes with Music has kept European operators from marketing it aggressively, Kuittinen said, adding it was too highly priced, considering the phone's thickness and relatively weak processor.
Nokia tried to boost the service, bundling it to the X6 flagship phone -- which went on sale late last year -- for an estimated retail price of 450 euros ($634), excluding taxes and subsidies. The X6 went on sale only with the music package.
It was overpriced especially because the target audience does not pay for music, said Gartner analyst Carolina Milanesi.
The new X6 model will sell for 299 euros, excluding taxes and subsidies, starting this quarter. It will also have a 16 gigabyte memory card, half the size of the original model.
Comes with Music offers unlimited music from major music labels and a number of independents and the music can be kept after the contract has expired.
The individual tracks can be downloaded to a phone and a single computer and are free, though the cost of the music is reflected in the price of the phone or subscription itself.(
(Reporting by Tarmo Virki; Editing by Rupert Winchester)