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Nokia Takes On Apple With Touch and Tunes

Nokia 5800 XpressMusic phone
The Nokia 5800 XpressMusic phone.
Click to enlarge. Source: Nokia
Nokia took a few swings at Apple's iPhone and iTunes service today, with a one-two punch consisting of its new touchscreen-based, music-centric smartphone and a free music download service.

During the unveiling of both the new 5800 XpressMusic phone and the "Comes With Music" service today at a London launch event, the world's largest phone maker also seized the opportunity to highlight the operating system underlying its newest device. The 5800 XpressMusic is built on the latest version of Nokia's (NYSE: NOK) S60 Symbian platform, and serves as a indication of some of the advanced features the company expects to deliver through the OS.

The Nokia 5800 XpressMusic, which industry watchers had believed would be called the Tube, includes a number of advancements designed to help Nokia claim a larger share of the market for high-end, feature-packed phone market -- currently buzzing about both Apple's (NASDAQ: AAPL) iPhone and the recent debut of T-Mobile's HTC G1, which is powered by the Google-backed Android operating system.

For one thing, the 5800 XpressMusic is Nokia's first mass-market device with a touchscreen -- similar to both the iPhone and the G1. It also provides a drop-down menu for easy access to music, as well as one-touch access to a Web browser and other applications. The user interface also provides a widescreen display -- another feature similar to the iPhone's and G1's designs.

The 5800 XpressMusic also includes a handful of unique enhancements, like unique sensors that provide for some unique applications -- like flipping the phone upside down to shut off the ringer.

Aside from design advancements, the 5800 XpressMusic will also serve as the flagship device supporting Nokia's new Comes With Music subscription offering -- marking the latest effort by Nokia to latch onto the attraction that consumers have shown for music-centric mobile phones.

Comes With Music -- which officially debuted today after having been introduced last month -- provides a year of unlimited access to the Nokia Music Store catalog with the purchase of a supported phone. The program builds on Nokia's existing, iTunes-like music store, and its catalog now includes EMI Music, Universal Music Group, Sony BMG Music Entertainment and Warner Music Group, the company said.

Users of the service get to keep their downloaded music for as long as they own their device -- even after their yearlong subscription ends. But they cannot transfer it to other devices, Nokia has said.

Big bets on music

Industry watchers said the smartphone's sleek design -- with its emphasis on music and multimedia -- plus its Comes With Music subscription support, should help it receive strong consumer reception.

"This is Nokia's premium music product but also combines a number of other strong multimedia elements and will no doubt be a big success," Peter Cunningham, senior analyst at Canalys, told InternetNews.com.

"At the end of the day, consumers do not care whether a phone is 'smart' or not, so it will depend on the services that vendors offer on specific products and how they position and price them," Cunningham said. "Music is a very popular hobby, and vendors are now banking on the fact that consumers will want this on their phones."

Nokia is clearly banking on that love for music and entertainment. Strategy Analytics reports that 84 percent of consumers said they would pay for a service like Comes with Music, and that 34 percent of users are willing to pay $10 or more per month.

But as one analyst noted, the device's much-touted touchscreen technology isn't going to drive Nokia fast ahead in the competitive handset market. For one thing, Apple's iPhone has offered such a design for more than a year and has been seeing sizable traction. Yet, touchscreen devices still aren't expected to see dramatic uptake. According to Strategy Analytics, touchscreen phone shipments will reach 90 million units worldwide in 2009, accounting for 7 percent of total volumes.

"This is a good all-around device, but touch is, however, not the main thing," Carolina Milanesi, research director for mobile devices at Gartner, told InternetNews.com. "Once again, it is up to what the user is looking for as far as a main experience."

"As the focus is music, this will compete more with Sony Ericsson products and the iPhone than with the [Google] G1," she said, adding she expects Nokia to provide touch functionality across its product portfolio going forward.

Instead of being wooed by it's iPhone-like design, Milanesi said that Nokia users are more likely to embrace the 5800 XpressMusic, because of its familiar S60 UI and its relatively low price point. In the UK, the device will carry a suggested price of approximately $395, or 279 euros, without carrier subsidies.

Exactly what the U.S. price will be remains a mystery, however. Nokia spokespeople declined to say for how much the device would retail in the U.S., where the vast majority of phones are steeply subsidized by carriers. There is currently no wireless carrier partner at this time, they told InternetNews.com.

For the time being, at least, Nokia is content to focus its attention elsewhere.

"As the primary launch countries are predominantly in Asia, Nokia is unlikely to reverse its fortunes in the U.S. in the near future," Cunningham said.

Souped-up Symbian

The launch of the 5800 XpressMusic also serves to highlight the debut of the fifth version of Nokia's Symbian-based S60 operating system.

With Nokia having earlier this year purchased Symbian, the OS's creator, it's now in the position of promoting the software to rival handset manufacturers as well as application developers. As a result, Nokia said the new OS would help both create more advanced and innovative applications.

The fifth version of the S60 platform now supports Adobe Flash Lite 3, as well as Web browsing via touch or a stylus. It also syncs with the phone's sensor technology, and supports photo imaging tools that enable users to erase red-eye, adjust image quality and add text and graphics to pictures.

According to Nokia 180 million S60 devices have been shipped as of the end of this June.

Appealing to application creators is also shaping up to be a major new front in the phone wars, with major phone vendors and carriers pitching the uniqueness and breath of their mobile apps as differentiators.

Recently, both Apple and Google have begun making their cases to developers to join up. Additionally, Apple this week relented on a stringent non-disclosure requirement for its iPhone developers in a move some saw as an effort to broaden the platform's appeal, in the wake of new competition from Google (NASDAQ: GOOG) and Android.