With the launch of Apple’s much mooted iPhone on the horizon, many leading phone manufacturers are rallying together to try and proactively take a lead… or is it just a reactive damage limitation exercise? Can the might of the iPhone brand and all the hype surrounding it take on an entire industry? Only time will tell.

The article below, from the Financial Times has all the details.

Mobile phone groups take on iPhone
By Maija Palmer in London
Published: June 13 2007 22:02 | Last updated: June 13 2007 22:02

The mobile phone industry will on Thursday 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.

The MusicStation service has backing from the handset manufacturers 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.

Music companies are hoping that MusicStation will help kick-start mass-market consumption of music over mobile phones.

The service launches just 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.

“We were keen to jump through the finish line first,” said Rob Lewis, chief executive of Omnifone, the privately-owned UK start-up company behind the MusicStation service. “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 that have been pre-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. It is estimated that 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 just six songs a year, at a typical price of £1 (€1.48) a song.

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

Users will be able to listen to the songs and store them on the phone, but not burn them on to CD or distribute them over the internet.

from b2bsee * B2B Blog