"To become a global leader in mobile music, Nokia needs to move onto the hallowed turf dominated by Apple's iPod. Apple's dominance of the portable music experience stems not just from the iPod's functionality, ease of use, and cool design, but also its tight integration with the music delivery platform, iTunes. In many respects the iTunes brand is as robust and well appreciated as the iPod device," said ABI Research's Jake Saunders.

ABI Research forecasts that handset shipments will clear one billion in 2006 and that multi-purpose and dedicated music player mobile devices will represent more than 125 million annual shipments by 2009.

Principal analyst Stuart Carlaw said, "The Loudeye acquisition is intended to assist Nokia in strengthening its position in the music market's premium, heavy duty user categories: consumers who typically purchase multi-purpose and dedicated music player mobile devices."

According to a statement by ABI Research "end-users currently prefer dedicated music players. Over time however, music-capable mobile phones will become increasingly pervasive. ABI Research estimates that by 2009 seven out of ten music-capable devices will be multipurpose mobile devices rather than music-only devices."