Nokia "free" music phone sales to start Oct 17

By Tarmo Virki

HELSINKI (Reuters) - Nokia's first phone model with free access to music is scheduled to go on sale on Oct 17 in Britain, retailer Carphone Warehouse said on its Web page.

Nokia's "Comes with Music" bundle of phone and music service could help the music industry make up for falling CD sales, while challenging dominance of Apple's iTunes in the digital music market.

The package will differ from other bundles on the market as users can keep all the music they have downloaded during the 12 month subscription period.

Carphone, the exclusive retailer for the first model, said the phone was expected to go on sale on Oct 17.

A Nokia spokesman declined to comment.

Nokia has signed deals with the top three music labels -- Universal, Sony BMG and Warner Music Group -- to offer their tracks on the service.

Having the world's three largest labels on board is set to help Nokia attract smaller music companies and challenge the dominant pay-per-track sales model for digital music.

"'Comes with Music' and other bundled services, should they succeed, offer a lifeline to the music labels which have seen revenues decline sharply in the digital age," David MacQueen, analyst at researchers Strategy Analytics, said in a statement.