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Warner Music Group, the third largest music label, will license music to Nokia's Comes With Music service, a Warner Music spokeswoman confirmed Monday.

Nokia now only lacks EMI's participation in the service, which offers unlimited free access to music for a full year.

During that time, users will be able to transfer their Comes With Music library to a PC as well as to a new Nokia handheld, but they won't be able to transfer it to iPods or other non-compatible devices.

At the end of the year, Nokia users won't lose their music. It will live on their computer or Nokia device for as long as they own them. To acquire new music after the year is over, Nokia phone owners can either purchase downloads from the Nokia Music store or join the company's subscription service.

The story was first reported by .

The Comes With Music service won't be ready until later this year.

In contrast, Verizon's V Cast service announced Monday that it has begun selling downloads from all four major labels. Not only that, but the music sold is free of copy protection software and will play on iPods and other digital music players.

To this point, selling DRM-free music hasn't proven to be much help for Apple competitors but it's probably better than a service that ties consumers to one device, regardless of how much free music they are given.

With the planned acquisition of mobile software maker Symbian, Nokia has decided to grab its future and run with it.

Nokia's decision to acquire the remaining stake in Symbian that it doesn't already own is designed to accelerate the mobile phone giant's product development--and serve as an open-source operating system platform to other handset makers, wireless carriers, software developers, and chipmakers, analysts say.

As a result, Nokia and other industry players hope to create a stronger defense against Apple's popular iPhone, Google's pending Android phone, and Microsoft's mobile operating system, analysts say.

"Nokia realized that under the current structure (where they owned only a minority stake), they could only hope Symbian would unlock their operating system and open it up to developers, handset makers, chipmakers, and carriers," said Jim Kelleher, an analyst with Argus Research.

Nokia and other electronics makers have formed the Symbian Foundation, a nonprofit that aims to create an ecosystem. The foundation is backed by carriers AT&T, Vodafone, and NTT DoCoMo and hardware competitors LG Electronics, Motorola, Samsung Electronics, and Sony Ericsson. Also joining the foundation are STMicroelectronics and Texas Instruments.

"By being a 100 percent owner, Nokia can push the Symbian Foundation initiative forward without the potential of dissenting stakeholders," said James Faucette, an analyst with Pacific Crest Securities. "Nokia wants to attract more development input from other sources and develop a reasonably good alternative to other operating systems that are being developed."

Of course, Nokia is also looking to bolster its own performance with the Symbian acquisition.

"Nokia is trying to accelerate its product development by acquiring Symbian and bringing development in-house," said Mark Sue, an analyst with RBC Capital Markets.

Nokia has seen its worldwide market share steadily erode over the recent quarters from roughly 50 percent of the handset market to around 45 percent, Sue noted.

Three to four years ago, Nokia faced a steep challenge as its competitors launched spiffy, colorful slider cell phones, Kelleher said. Nokia had no such offerings in the works.

"Nokia was guilty of having hardware with no slick, no color. It was just a lump...Nokia was caught short," Kelleher said. "But Nokia has since come back fast and fierce, with new changes to their phones."

He added that the cell phone maker has come to the realization it needs more than just hardware to keep customers interested and up-to-date.

This year, for example, Nokia launched such products as its Xpress Music Phones, the Nokia Tube, in response to Apple's iPhone, and its Prism clamshell phone with triangular buttons.

Mobile phone maker Nokia announced Tuesday that it plans to acquire the 52 percent of mobile software specialist Symbian that it does not already own, in a cash deal valued at about 264 million euros, or $410 million.

Long a phone maker, Nokia has been dabbling in Web apps and services through its Ovi brand.

(Credit: Nokia)

In addition, Nokia and a number of other electronics makers are forming the Symbian Foundation to drive the development of Web applications for use by consumers on cell phones. The foundation plans to provide a unified platform that has a common user interface framework and that will be available for all foundation members under a royalty-free license, Nokia said.

"Our vision is to become the most widely used software platform on the planet," Nigel Clifford, CEO of Symbian, said in a statement.

That ambition is a resounding shot across the bow of both Apple, which earlier this month unveiled its iPhone 2.0 ecosystem, and Google, which has been working on its own Android platform for mobile applications.

Nokia has already taken steps toward its own ecosystem of Web applications and services through efforts such as its Ovi brand for gaming, social networking, and mapping.

The other backers of the nonprofit Symbian Foundation are AT&T, LG Electronics, Motorola, NTT DoCoMo, Samsung Electronics, Sony Ericsson, STMicroelectronics, Texas Instruments, and Vodafone.

Nokia already owns 48 percent of Symbian, maker of a widely used operating system for mobile phones. It has now extended a cash offer for the Symbian shares not already in its hands at a price of $5.67 (3.647 euros) per share.

Most other stakeholders in Symbian--Ericsson, Sony Ericsson, Panasonic, and Siemens--have already accepted the offer, and Samsung Electronics is expected to accept it as well, Nokia said.

Correction at 10 a.m. PDT: The story incorrectly listed which push e-mail solutions the E71 works with. It does not work with BlackBerry Connect or GoodLink.

Nokia E66

(Credit: Nokia)

It may be that the Nokia E series sometimes suffers from Jan Brady syndrome as it gets overshadowed by a flashier member of its family--the Nokia N series (aka Marcia Brady). But the E series is just as bright and deserves some recognition too.

Traditionally, the E series devices have been very corporate centric and serious in design, but now Nokia is updating the line with the introduction of the Nokia E66 and Nokia E71, bringing with them a modernized look and a fresh set of features. Here's the breakdown:

Nokia E66: The successor to the Nokia E65, the E66 continues to offer a cool slider design, but it's been trimmed down and comes in gray or white with steel accents. The smartphone also has "turn-to-full view," which is similar to the iPhone's accelerometer feature in that when you turn the device on its side, the screen orientation will automatically switch from portrait to landscape mode. You can also alternate between Business and Personal mode. In Business mode, you'll have all your productivity tools readily accessible on your home screen, such as e-mail, calendar, and documents. Meanwhile, when you switch to Personal view, you'll get access to your multimedia files, the Web, and so forth.

The Nokia E66 will continue to run the third edition of the S60 platform on the Symbian operating system and has integrated Wi-Fi and Bluetooth 2.0 (with A2DP support). Plus, it now offers assisted GPS and U.S. 3G support (850/1900; HSDPA). Other goodies include a 3.2-megapixel camera, support for Nokia's Ovi Internet service, 110MB internal memory plus microSD slot (supports up to 8GB cards), and a 2.4-inch QVGA nontouch display.

Nokia E71

(Credit: Nokia)

Nokia E71: The E71 represents the more dramatic design makeover of the two. Taking over for the Nokia E61i, the E71 is still very much a messaging-centric device with its full QWERTY keyboard but it's not as bulky or dull-looking anymore. The smartphone measures 4.4 inches tall by 2.2 inches wide by 0.4 inch deep and weighs 4.4 ounces, compared with the E61i's dimensions of 4.6 inches tall by 2.7 inches wide by 0.5 inch deep and 5.3 ounces. The E71 will also come in gray or white, and have a 2.36-inch, 16 million-color QVGA display.

Feature wise, the Symbian smartphone supports Mail for Exchange, POP/IMAP accounts, and works with a number of push e-mail solutions, including Intellisync Wireless E-mail, Visto, and Seven Always-On Mail. The E71 will also have integrated Wi-Fi, Bluetooth 2.0, HSDPA, assisted GPS, and the Business and Personal home screens.

Outlook: Both the Nokia E65 and E61i have a loyal following and have garnered good user reviews, so I'm sure current owners will be interested in the upgrade. However, as with Nokia's other high-end phones, the Nokia E66 and Nokia E71 have not been picked up by a U.S. carrier and will only be sold as unlocked handsets, meaning they'll carry a steep price tag (pricing has not been finalized but we suspect somewhere in the $300 to $500 range) and thus, limit the reach of the smartphones. Still, the E66 and E71 are shaping up to be some strong workhorses for the business community, and we'll, of course, give them a workout when we get them in for review. Both mobiles are slated to be available in the third quarter (around July/August) with the Nokia E71 expected to ship slightly ahead of the Nokia E66.

With a 47.9 percent stake in Symbian, the leading mobile platform that it co-founded in 1998 and which today powers some 206 million mobile phones, Nokia has long championed it at the expense of rival platforms such as Linux.

No longer.

The mobile-phone maker is increasingly selecting Linux for Internet-enabled mobile devices, with its CFO declaring of Linux, "It's going to be terribly important."

NEW YORK--Nearly six months after its next generation of music phones hit the market in Europe, Nokia is finally bringing the latest XpressMusic phones to the United States.

T-Mobile USA on Tuesday unveiled the Nokia 5310 XpressMusic phone, a slim, music-playing handset, at a party here that featured specialty cocktails with names like Disco Lemonade and Purple Rain, and performances by up-and-coming artists K.i.D Cudi, Chester French, and the DJ Kid Capri.

Showing off the Nokia 5310 XpressMusic phone at the T-Mobile party in New York.

(Credit: Marguerite Reardon/CNET Networks)

T-Mobile is the first and only wireless operator in the States to sell the new 5310 Xpress Music phone and its big brother, the 5610 Xpress Music phone. Both phones were announced by Nokia last August, and they started shipping in Europe in the fourth quarter.

The Nokia 5310 MusicExpress handset hits T-Mobile stores on May 28. Unfortunately, the flashier Nokia 5610 won't be available until sometime this summer. Why the wait? The company is still adding and making special tweaks to the 5610 that are specially designed for the T-Mobile network, said Tom Harlin, product marketing manager at T-Mobile.

The Nokia 5310 XpressMusic is a very slim candy bar-style phone measuring only 0.39 inches thick and weighing just 3 ounces. It features a 2-megapixel camera that takes still pictures and videos. And, of course, it's got a music player with external controls and stereo Bluetooth connectivity, along with T-Mobile's special MyFaves support.

Also in the box is a wired stereo headset, a USB cable for loading music, and a memory card. To top it off, T-Mobile has preloaded the phone with two exclusive new songs from artists Panic At The Disco and Phantom Planet. As an added bonus, the Nokia 5310 is also loaded with Panic At The Disco's latest video, "That Green Gentleman." T-Mobile also included a making-of-the-video promotion, with a greeting from the band.

"We wanted people to be able to use it and start listening to music right out of the box," Harlin said.

Getting handsets like the XpressMusic phones into the U.S. market is important for Nokia, as it tries to bolster its stateside market share. The company, which is the worldwide leader in handset sales, is in fourth place in the U.S. market. It has been working closely with operators to get more of its mobile phones into the market, but it's struggled to make significant headway. That said, Nokia's chief financial officer told Reuters earlier this week that it expects to grow its market share in North America into the double digits by the end of the year.

The music phones could be a good start for the company. Music-enabled phones made up 60 percent of the phones sold in the U.S. during the first quarter of 2008, according to NPD Group.

The only downside to the new Nokia XpressMusic phones is that neither phone supports 3G, which means that they won't be able to take advantage of T-Mobile's newly upgraded network. The phones also lack Wi-Fi. But at $50 for the Nokia 5310, the trade-off might be worth it. Pricing for the Nokia 5610 hasn't been disclosed yet.

Sales of cell phones in the U.S. declined during the first quarter of 2008, as the maturing market was hit by a slowing U.S. economy.

Nearly 31 million handsets were sold in the U.S. during the first quarter of this year, down 22 percent from the same period a year ago, according to the NPD Group. Sales of mobile handsets generated $2.7 billion, down from $2.9 billion for the same period a year ago.

This is the first time since the NPD Group started tracking mobile handset sales in 2005 that it a saw a decline in the first quarter after the holidays. And the market research firm believes the decline could be tied to economic troubles.

"Cellular phone service has become a practical necessity in modern life," said Ross Rubin, director of industry analysis for NPD. "However, with looming economic concerns on the horizon, many consumers may be holding back on new handset purchases, especially those tied to new pre-paid plans."

The maturing market may also be playing a role in the slowdown. Roughly 84 percent of the U.S. population already subscribes to cell phone service, according to the trade group CTIA.

But feature-rich phones like smartphones still seem to be selling well. In fact, smartphones, which offer e-mail, Web surfing, music, and other Internet services, accounted for about 17 percent of all mobile phone sales during the first quarter, the NPD Group reported. This was an increase of 10 percent over the previous year. The study also found that 60 percent of phones purchased in the first quarter were music-enabled. This is compared with 41 percent of phones the prior year.

News of slowing sales is bad for Motorola, whose handset business is currently up for sale. Despite its mountain of woes, Motorola maintained its lead in the U.S. market during the first quarter. But its overall share of the market declined from 35 percent in the first quarter of 2007 to 27 percent this year. Samsung and LG reported strong market share with 18 percent and 17 percent respectively, according NPD.

Research in Motion, the maker of the BlackBerry, edged out Sanyo as the fifth largest mobile phone maker in the first quarter of 2008.

But Nokia, the worldwide leader in handset sales, is still struggling in the U.S. market. The company came in fourth place with 8 percent market share according to NPD. Nokia has struggled to get a foothold in the U.S. market where most devices are sold through carriers. One of the main problems is that the company's hottest phones aren't sold in the U.S. market or come to the market months after they've been offered in Europe or Asia.

But Nokia executives say they are committed to increasing market share in North America. On Monday, Nokia's Chief Financial Officer Rick Simonson told Reuters that it plans to have strong double-digit market growth in North America within a year. The company has opened a research and development facility in Southern California, which it hopes will help it develop products specifically for the U.S. market. Still, Nokia believes that its massive scale will help it in North America.

The deal was accepted by the EU without conditions after a six-month antitrust probe. The deal is worth $4.5 billion and is expected to be finalized in June, according to a statement from TomTom. Both companies are based in the Netherlands.

For TomTom and Tele Atlas, this was "the best possible outcome allowing the new combination to go ahead with the full execution of its strategy," the companies said in a joint announcement.

The decision came a week ahead of a May 21 deadline, suggesting that even bigger deal under scrutiny by the EU will go through. Nokia, the Finnish mobile handset manufacturer, wants to buy the world's largest company in digital mapping technology, Chicago-based Navteq for $8.1 billion. The deadline for that review is August 8.

Both deals were accepted by the U.S. antitrust regulators last year without further investigation and the fact that the EU took a closer look surprised many industry experts. But as the potential for location-based services is growing, the commission wanted to make sure that these two deals--creating a virtual duopoly in digital mapping--would not hinder competition.

"I am now satisfied that the innovation and competition we have seen in satellite-navigation devices until now will continue after this merger," Neelie Kroes, EU Commissioner for Competition in Brussels, said in a statement Wednesday.

Navteq and Tele Atlas produce digital maps and software for navigation systems in cars and portable navigation devices such as Garmin or mobile phones. They also provide the data for Internet maps on sites like Google Maps.

Nokia argues concerns of the regulators that its acquisition will restrict the access for others to digital maps as unfounded.

"Why would Nokia pay the amount of money we are paying for having a very good base of customers and then try to aggrieve those customers?", Michael Halbherr, vice president of Context Based Services at Nokia said in an interview earlier this week with CNET News.com.

Nokia executives believe the Navteq-deal is related to the decision on Tele Atlas. Both companies have refused to accept demands from the regulators that they should guarantee that digital maps will be available for everyone. "I think that the Tele Atlas deal is not being reviewed in isolation. The European Commission has had enough time with both deals to basically form a complete thinking about the industry," said Michael Halbherr.

For Nokia, location based services is very much a promise of the future. The company expects to ship 35 million GPS-enabled phones this year.

From a European industry point of view, these deals consolidate world dominance of location based services in the home base. Navteq is the world's largest maker of maps used for car navigation, while Tele Atlas is No. 2.

In the U.S. the development is seen as positive. At ESRI, a company that sells software for geographic information systems, founder and Chief Executive Jack Dangermond welcomes more concerted efforts.

"The world needs utility companies that create and manage geospatial data," he said. "And these are companies that have fought their way to the top and they're very good: they serve their data and sell their data to our users in the private domain."

One company that has teamed up with ESRI is Google Maps, which now use digital maps from both Navteq and Tele Atlas. John Hanke, head of Google Maps and Google Earth, said that there is a vast amount of geodata locked up in different government agencies that should be made publicly available.

"I don't think it will happen anywhere in the near future. It's hard to share that data, to export it, but they should open up their servers as its public information," Hanke said during a break at the Where 2.0 conference in Burlingame, Calif.

Dangermond agrees. There will be no shortage of data despite concentration in a few hands.

"There are others, like Openstreetmap, emerging startups that I think also will participate in a smaller scale and then also individual agencies like cities. They all create and maintain their own data. It will remain an open and competitive environment I think."

He said he doesn't see a duopoly problem.

"There will be open competition and both of them are sincerely interested in the geo market. By having two competitors they're fighting against each other and keeping the prices low. If there was only one, then I might have a different opinion, but I think with two it's a healthy market. And it doesn't prohibit other people from getting in."

"They are doing the world a great service by taking on the responsibility of building these infrastructure layers."

He also said he feels the companies should be compensated.

"Well, free, they have to pay for all their investments. I suppose they are spending hundreds of millions of dollars a year just to create and maintain these infrastructures. So this kind of investment needs to be capitalized and get returns. But they both are good citizens in the GIS world at this point."

Comes With Music customers will have total access to the music of Alicia Keys as well as every other Sony BMG artist free for a full year.

(Credit: Sonybmg.com)

The concept behind Nokia's new music service "Comes with Music" is starting to catch on with the major music labels.

Sony BMG, one of the four top recording companies, announced Tuesday that it has partnered with Nokia to make its music catalog available on select Nokia devices. After buying one of the devices, users will get unlimited free access to the music of Alicia Keys, the Foo Fighters or any Sony BMG artist for a full year.

During the 12 months of the offer, users will be able to transfer their Comes With Music library to a PC as well as to a new Nokia handheld, but they won't be able to transfer it to iPods or other non-compatible devices. At the end of the year, Nokia users will have the choice of acquiring new music by either purchasing downloads from the Nokia Music store or joining its subscription service.

Nokia is expected to launch the Comes With Music service in the second half of the year.

What is groundbreaking about these deals--Universal Music Group was first among the labels to join the service--is that Nokia users can download any song from Sony BMG and keep the music for the rest of their lives. There is no ceiling on the number of songs and the music doesn't disappear at the end of the year.

This is believed to be the labels' deepest foray into free music, and is reflective of the industry's attempt to find new business models that can compete with piracy, shrinking CD sales, and iTunes.

"We think this business model will encourage users to sample a wide range of material, expand their musical tastes, and listen to more music than ever before," said Thomas Hesse, Sony BMG's President of Global Digital Business.

Sources told CNET News.com last month that Apple has discussed a similar offer with the music labels, adding that the concept behind Comes With Music is not exclusive to Nokia.

Should the concept of supplying year-long all-you-can-eat music catch on, other device makers wishing to gain access to music may be forced to adopt similar services.