iPhone v.s. MusicStation

Source : the FT. Emphasis mine

By Maija Palmer

Published: June 14 2007 03:00 | Last updated: June 14 2007 03:00

The mobile phone industry will today launch a challenge to Apple’s iPhone by unveiling a low-cost, flat-rate music service that can be accessed on most handsets in Europe and Asia.

MusicStation has backing from the handset makers Nokia, Sony Ericsson, Motorola and Samsung and 30 mobile phone operators and all four music majors – Universal Music Group, Sony BMG, EMI Music and Warner Music International – as well as several independent labels.

Note: The people involved are music labels and device manufacturers(not Network Operators). Increasingly, we will see a divergence of strageties between network operators and device manufacturers

Music companies hope MusicStation will kick-start mass-market consumption of music over mobile phones. The service launches ahead of Apple’s iPhone debut in the US on June 29.

The iPhone will give users easy access to Apple’s iTunes online music store, building on the success of the company’s popular iPod portable music player.

Rob Lewis, chief executive of Omnifone, the privately owned UK start-up company behind MusicStation, said: “All European and Asian consumers will have access to MusicStation well before iPhone’s arrival in those regions.”

Telenor, the Scandinavian operator, will be the first to launch the service in Sweden, but it is expected to be rolled out throughout Europe, Asia and Africa over the next few months.

Manufacturers will begin producing handsets re-loaded with software to access MusicStation. Many of these devices will be mid-priced, in contrast to the iPhone, which will have a price tag of about $499 (£253). It is estimated 100m MusicStation-enabled handsets will be sold over the next 12 months, dwarfing the 10m iPhone handsets Apple aims to ship in the next year.

The industry estimates that mobile music consumers on average download six songs a year, at a typical price of £1 a song.

Music groups stand to increase their earnings significantly by taking a share of the weekly €2.99 (£1.99) flat fee MusicStation charges for unlimited access to a catalogue of more than 1m songs. The fee includes all downloading charges.

Users will not be able to burn songs on to CD or distribute them over the internet.