Nokia to license Microsoft DRM

Mobile-phone giant Nokia will start to use Microsoft's copy protection software to boost the use of wireless entertainment, like music and videos, the two companies said on Monday.

Microsoft's technology allows users of Nokia mobile phones to share protected pieces of content — like music, games or videos — between phones, PCs and other devices.

Nokia, the world's largest mobile-phone maker, will license Microsoft's PlayReady digital rights management (DRM) technology, and build it into its S60 software, the most widely used software platform in the mobile-phone industry.

Nokia's S60 software, built on UK-based mobile phone-software firm Symbian's operating system, is used extensively in Nokia's lineup, but also in LG Electronics and Samsung Electronics' advanced mobile phones.

Its closest rival is Microsoft's own Windows Mobile, but analysts said the deal should benefit both.

"It is in both [companies'] interest that there is compatibility between the two and content can flow between devices," said Geoff Blaber, senior analyst at consultancy CCS Insight.

In 2005 the two companies signed their first co-operation agreement to put Windows Media player on to Nokia phones — raising eyebrows, as the two had been fierce competitors in the mobile-software industry.

As mobile-phone prices fall, handset vendors are looking for new revenue from potentially lucrative software operations, while, at the same time, Microsoft is looking for new revenue from the mobile space.

In June, Nokia said it would reshape its whole organisation to better focus on software and services.

Nokia said it expects many S60 and lower-tier Series 40 phones using PlayReady technology to hit the market in 2008. Series 40 phones are also included in the deal.

"This takes it to a huge portfolio of Nokia devices," Blaber said. "The deal makes perfect sense for Nokia. There isn't so comprehensive a DRM solution available for the mobile space."

£10bn industry
The companies said they expect the deal to widen the entertainment offering on mobile phones.

Entertainment services — games, music, TV, adult content and gambling — will grow to $38bn (£18bn) by 2011 from around $18.8n in 2006, according to research firm Informa.

Music has been the main driver for mobile entertainment so far, but the breakthrough of mobile television broadcasts is expected to give the market a new boost.

"This is a new thing and developing at a rapid clip. Can it get better and move to the mainstream? Absolutely. Nokia and Microsoft, being large influential companies, are trying to push the ball forward," said Chadd Knowlton, general manager for content access and protection at Microsoft.

"Mobile television — that's going to be much more mainstream than today's entertainment features," Knowlton said.

Microsoft and Nokia said they would also work together to enhance and simplify consumer access to digital content using mobile devices.

"This partnership will enable a very broad range of content to be available for consumers," said Sebastian Nystrom, a director at Nokia's technology unit.

Nokia is widely expected to launch an online music and mobile content store, a rival to Apple's iTunes, in coming months, using technology gained from last year's acquisition of US digital music distributor Loudeye.

Nystrom declined to comment on the possible impact the Microsoft deal could have on services built on the Loudeye acquisition, but said: "Overall, PlayReady will be the key component in offering such services to consumers."

Related Links:

• Go back to category Business to read more reviews and articles.
• Go back to Software Magazine's main page.