New Nokia Services, Gadgets Aim at Apple

Nokia Corp. unveiled new services and cell phones Wednesday that customers can use to download music and play games, a bid by the world's largest mobile phone maker to challenge Apple Inc.'s higher-end iPhone, as well as iTunes and the iPod.
The move by Nokia (nyse: NOK - news - people ), whose basic handsets give it a strong position in emerging markets, is the latest recognition that high-end markets require handsets with photo, music and video capabilities and quick access to the Internet.
One of Nokia's new phones can hold up to 6,000 songs. Other new gadgets include headphones, docking stations and speakers.
Nokia said it will focus its new Web services in a site known as "Ovi" - Finnish for "door" - that will include an online music store "with millions of tracks from major labels."
With the new services, consumers will be able to transfer music from PCs to compatible Nokia devices and play and download N-Gage games on "tens of millions" of existing Nokia devices, the Finnish company said.
In a Wednesday note to clients, American Technology Research analyst Mark McKechnie said Nokia's "expanded efforts into services ... will enable (the company) to offer `experiences' rather than just `devices,' which we believe will become more important as mobile services move from voice-centric to Internet-centric."
The announcement in London sent Nokia's U.S. shares up $2.17, or 7.2 percent, to $32.18, setting a new 52-week high.
"The industry is converging towards Internet-driven experiences, and Ovi represents Nokia's vision in combining the Internet and mobility," CEO Olli-Pekka Kallasvuo said in London.
Nokia's new top-range models, some including 5-megapixel cameras, Carl Zeiss optics, and memory of up to 8 gigabytes, range from $300 to $750.
Nokia bought Loudeye Corp., a leading provider of digital media distribution services, for $60 million last year to expand its digital music offerings. Now it has completed deals with the four major music labels - Vivendi SA's Universal Music Group, Warner Music Group (nyse: WMG - news - people ) Inc., EMI Group PLC and Sony (nyse: SNE - news - people ) BMG Music Entertainment, a joint venture of Sony Corp. and Bertelsmann AG. The "Nokia Music Store" will open this autumn in Europe and later in Asia and offer "locally relevant music" as well as hits.
Apple (nasdaq: AAPL - news - people )'s iTunes store is currently the leading online music retailer, and its iPod is the most popular digital media player. The company in June entered Nokia's territory in releasing the iPhone, which combines a cell phone, media player and wireless Internet device.
Nokia's announcement emphasized the new items' sleek design and slim size - one phone is less than 10 millimeters thick - another apparent attempt to counterbalance Apple and its renown for design.
Last week, Nokia and Microsoft Corp. (nasdaq: MSFT - news - people ) also announced that access to some of the software maker's most popular Web services, like Hotmail and Windows Live Messenger, will come built into some Nokia phone models.
Since losing out to rivals that produced popular camera features and clamshell models several years ago, Nokia is regaining its dominance in part because it has already offered some successful smart phones.
In the second quarter, Nokia sold 100 million mobile devices - more than its three main rivals combined. It accounted for 37 percent of the global market, according to technology research group Gartner Inc. (nyse: IT - news - people ) - up from 34 percent a year earlier.
Nokia, based in Espoo near the Finnish capital, Helsinki, has sales offices in 130 countries and employs 110,000 people worldwide.