Nokia hopes music will bring its customers together

US-based Loudeye, which bought the British music download service OD2 in 2004, administers a licenced catalogue of about 1.5 million tracks.

The deal gives Nokia access to content it can offer to millions of customers with music-enabled mobile phones.

Nokia said it would soon offer a "comprehensive, mobile music offer".

Music vision

The Finnish firm's NSeries phones can accept a range of digital music formats including both MP3 and Apple's and Windows' preferred formats - although some music may not work because of download restrictions.

Nokia has sold 15 million music-enabled phones over the past three months, illustrating the trend for people to use their phones to access entertainment products.

People should be able to access all the music they want, anywhere, anytime and at a reasonable cost Anssi Vanjoki, Nokia

It sold 45 million such phones last year, and expects sales to top 80 million in 2006.

"People should be able to access all the music they want, anywhere, anytime and at a reasonable cost," said Anssi Vanjoki, an executive vice president at Nokia.

"With this acquisition, we aim to deliver that vision and a comprehensive music experience to Nokia device owners during 2007."

The deal, which much be approved by Loudeye shareholders, is expected to be completed towards the end of the year.

Seattle-based Loudeye employs about 130 staff in five countries.

In addition to its music catalogue, Loudeye provides the technology for digital media platforms through which content can be sold.