The unlimited-download service won't be released this year in the U.S. as planned.
LONDON -- After promising earlier this year that a 2009 U.S. launch for the service was in the works, Nokia told Forbes on Monday that it has now been pushed back to 2010. Nokia's announcement comes the same day that Apple meta-announced that it will make an announcement on September 9. Speculation on Apple's is also music-centered, with some expecting iPods preloaded with digitally remastered Beatles tracks and others expecting an Apple answer to Guitar Hero. Nokia's long-awaited product was not so much veiled in mystery as the phone maker had launched already in other markets.
A spokeswoman for Nokia confirmed that the Stateside launch had been delayed until next year, but would not give further comment on plans for "Comes With Music," which began life in October 2008 in only one country--Great Britain. Since then, nine other countries have been added to the list, including Singapore and Brazil, but putting the brakes on an American launch may indicate that the reception has been pretty lukewarm.
Yahoo! Buzz"Comes With Music has been below expectations in developed markets, though Nokia is having more success in emerging markets," said Mark Mulligan, an analyst with Forrester Research. "In Western Europe and specifically Great Britain, Nokia has been hindered by not having a strong operator route to market."
Since launching the service, which allows users to download an unlimited number of copy-protected music tracks for 12-18 months after buying a compatible handset, Nokia ( NOK - news - people ) has only managed to get one network operator in Britain on board--Orange, a subsidiary of France Telecom ( FTE - news - people ). Nokia's first route to market was retailer Carphone Warehouse ( CRWHF - news - people ), the European partner of Best Buy ( BBY - news - people ), but network operators are crucial in developed markets because of the subsidies they bring to entice consumers.
Mulligan said that Nokia had not done enough to make the proposition an attractive one for operators, given that Vodafone ( VOD - news - people ), Deutsche Telekom ( DTE - news - people ) and their peers had already spent money creating their own branded music-download services. Although Nokia has worked on making the terms more flexible, Mulligan said the handset-maker would need to put more "meat on the bone"--or more significant shared revenues--to add operators.
Although a delay to the U.S. launch is hardly good news for Nokia in the short term, in the long term it may be just what the company needs to perfectly pitch its service to the American market. In the past year it has announced several new touch-screen phones that are compatible with Comes With Music, and if it means fine-tuning the product and launching with the right phone it just might be worth holding back, says Paolo Pescatore, an analyst with CCS Insight.
Comment On This Story"Nokia is learning as they're going along…It's a case of fixing it over time," said Pescatore. "For the U.S., they need to make sure the pieces are together before they launch any service."
Nokia's market share in the U.S. is at barely 7%, a far cry from its global share of 38%. The arrival of Apple ( AAPL - news - people ) onto the scene, as well as the popularity of Research In Motion ( RIMM - news - people ) and its flagship BlackBerry product, has made the environment Stateside far tougher for Nokia over the past few years.
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