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Sprint Races into Mobile Music

Wireless giant Sprint Nextel (S) has signed a deal with music distributor Groove Mobile and plans to begin marketing a wireless download service on Monday, Oct. 31, BusinessWeek Online has learned. Coming just two months after Cingular started selling Motorola (MOT) phones loaded with Apple's (AAPL) iTunes software, the agreement will let Sprint customers get music onto their mobile phones wirelessly.

It's another sign that wireless companies are launching an all-out battle for a piece of the quickly growing digital music market, which is now dominated by Apple, maker of the wildly popular iPod music player. The wireless industry has had its sights on music for years but has been slow to figure out a way to share revenue with other partners (see BW, 4/4/05, "Major Hangups Over the iPod Phone").

Groove Mobile, a privately held company in Andover, Mass., already has amassed a solid list of clients among carriers in other countries. It provides the infrastructure for Britain's Orange, a wireless carrier owned by France Telecom (FTE), Singapore's Singtel, and others.

$2.50 PER SONG. Groove Mobile's technology will help break down barriers between mobile phones and other computing devices. It allows users to download songs to both mobile handsets and PCs, which hasn't always been possible in the U.S., where mobile music is in its infancy. It makes two different versions of each song available -- a higher-quality one for PCs and lower-quality one for phones. Both are included in the single download price. Sprint plans to initially charge about $2.50 per song, people familiar with the matter say. Sprint declined to comment on the matter.

Groove Mobile also allows customers to transfer songs from their PC back to their phone, a feature that further brings telecom and tech closer. It wasn't clear whether that particular feature would be available on Sprint's service, though.

The Groove Mobile infrastructure helps refine the experience of mobile music in other ways. It lets users start listening to music before the download is complete. And it allows users to download album art and other data along with a tune.

The market for music phones is expected to soar (see BW Online, "Hello Music"). About 112 million units are expected to ship this year, but that number should increase to more than 400 million in 2008, according to Strategy Analytics. Over time, the wireless phone industry could emerge as an important rival to Apple, which has nearly 70% of the market for digital music players. In the coming months, other carriers including Verizon Wireless are expected to develop more music plans of their own.


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