Nokia will launch its music downloading service in China, the world's largest mobile market, looking to emerging markets to invigorate the struggling service that competes with Apple Inc's popular iTunes.
The world's top cellphone maker will offer music from major labels and a number of independents as part of the China launch for its Comes with Music service tailored for downloads to cellphones and PCs, Nokia said on Thursday.
The launch of Nokia's unlimited music download offering in China adds further momentum to Nokia's leadership in the world's highest growth markets including Brazil, Russia and Indonesia, the Finnish firm said in a statement announcing the launch.
The forthcoming launch of the service in India will add significant scale and differentiation in another critical market.
Nokia unveiled the service in late 2008 in Britain -- seen as a test market for new mobile services in Europe -- but it has lacked operator support and has gained little traction in developed markets since then.
Reasons behind the lackluster performance include use of older supporting handsets for the product at its launch, software that some considered user unfriendly and a difficult to understand product offering.
Earlier this year Niklas Savander, the head of Nokia services, told Reuters the offering would focus increasingly on the emerging markets.
With more than 700 million subscribers, China is the world's biggest mobile market by users. But rampant piracy in the country has kept most major music labels and movie makers from realizing significant revenue there despite its huge potential.
The new service will initially be offered over eight Nokia models for sale in China, with entry prices starting from 140 euros ($187).
Globally, we have expanded the reach of our music service to 30 markets in just 18 months, Liz Schimel, global head of music, said, adding that labels signed on to the deal include Universal Music, EMI and the music arms of Sony and Time Warner's Warner Bros.
Nokia announced that the China service will break with its previous versions of its Comes with Music services by not including DRM software, which limits sharing of songs between different devices.
That move will allow consumers to freely share music between any device, unlike other markets where the service limits usage to just one phone and one computer.
Success will depend on indirect revenue such as advertising and cross-selling, otherwise margins will suffer, said Martin Garner, an analyst from CCS Insight. DRM-free could indicate future plans for Comes With Music, but high level of piracy in Chinese market may make this offer uniquely palatable to record labels.
(Editing by Doug Young and Lincoln Feast)