Nokia will drop the ailing "Comes with Music" offering from the new
version of its flagship X6 music phone, hoping a one-third cheaper
price tag will boost sales of the model.

Nokia tried to boost its Comes with Music service,
selling the X6 model only with the music package, but analysts said
many telecoms operators - key sales channel for handset vendors -
opposed the packaging.

"Nokia will have unbundled Comes with Music with
heavy heart. It's a cornerstone service for flagship products like the
X6, but this move reflects operators' reluctance to offer it," said Ben
Wood, head of research at CCS Insight.

Nokia unveiled Comes with Music in late 2008 in
Britain - seen as the acid test market for new mobile services in
Europe - but it has lacked operator support and has gained little
traction.

"This was an expected move - in our view, the early
demand for the bundled X6 has been soft," said analyst Tero Kuittinen
from MKM Partners.

"The lack of confidence in Comes with Music has kept
European operators from marketing it aggressively," Kuittinen said,
adding it was too highly priced, considering the phone's thickness and
relatively weak processor.

Nokia tried to boost the service, bundling it to the
X6 flagship phone - which went on sale late last year - for an
estimated retail price of 450 euros in Europe (sells for about $1125 in
New Zealand), excluding taxes and subsidies. The X6 went on sale only
with the music package.

"It was overpriced especially because the target audience does not pay for music," said Gartner analyst Carolina Milanesi.

The new X6 model will sell for 299 euros in Europe (NZ$596), excluding
taxes and subsidies, starting this quarter. It will also have a 16
gigabyte memory card, half the size of the original model.

Comes with Music offers unlimited music from major
music labels and a number of independents and the music can be kept
after the contract has expired.

The individual tracks can be downloaded to a phone
and a single computer and are free, though the cost of the music is
reflected in the price of the phone or subscription itself.

Nokia will drop the ailing "Comes with Music" offering from the new
version of its flagship X6 music phone, hoping a one-third cheaper
price tag will boost sales of the model.

Nokia tried to boost its Comes with Music service,
selling the X6 model only with the music package, but analysts said
many telecoms operators - key sales channel for handset vendors -
opposed the packaging.

"Nokia will have unbundled Comes with Music with
heavy heart. It's a cornerstone service for flagship products like the
X6, but this move reflects operators' reluctance to offer it," said Ben
Wood, head of research at CCS Insight.

Nokia unveiled Comes with Music in late 2008 in
Britain - seen as the acid test market for new mobile services in
Europe - but it has lacked operator support and has gained little
traction.

"This was an expected move - in our view, the early
demand for the bundled X6 has been soft," said analyst Tero Kuittinen
from MKM Partners.

"The lack of confidence in Comes with Music has kept
European operators from marketing it aggressively," Kuittinen said,
adding it was too highly priced, considering the phone's thickness and
relatively weak processor.

Nokia tried to boost the service, bundling it to the
X6 flagship phone - which went on sale late last year - for an
estimated retail price of 450 euros in Europe (sells for about $1125 in
New Zealand), excluding taxes and subsidies. The X6 went on sale only
with the music package.

"It was overpriced especially because the target audience does not pay for music," said Gartner analyst Carolina Milanesi.

The new X6 model will sell for 299 euros in Europe (NZ$596), excluding
taxes and subsidies, starting this quarter. It will also have a 16
gigabyte memory card, half the size of the original model.

Comes with Music offers unlimited music from major
music labels and a number of independents and the music can be kept
after the contract has expired.

The individual tracks can be downloaded to a phone
and a single computer and are free, though the cost of the music is
reflected in the price of the phone or subscription itself.