Between the Lines: Nokia is in tune with market

That Nokia is hunting a digital agency to work on a global music campaign (page 1) should come as no surprise to observers of the sector.

Scarcely a week passes without a handset manufacturer or mobile operator announcing a music-related initiative - from Sony Ericsson's ad-funded music shows on Channel 4, to T-Mobile's Street Gigs and Vodafone's TBA events.

But, for handset manufacturers such as Nokia, building a strong association with music is a business imperative. As mobile phone penetration reaches the 100-per- cent mark, the near-saturation of the market means sales growth is predicted to slow significantly. Nokia and its competitors must come up with new reasons for people to upgrade their handsets.

The route most appear to favour is a challenge to iPod's dominance of the MP3 market. But if they are to persuade customers to listen to music on their phones rather than on their iPods, they need to combine technological advances with a music-friendly image that appeals to their target youth audience - and using the internet is the right way to go about it.