Nokia will postpone the launch of its 'Comes with Music' music subscription service in the U.S. to next year, according to reports.

Nokia launched the service, widely seen as a potential iTunes competitor, in the U.K. last year by bundling free unlimited music downloads with some of its handsets. The first of Nokia’s phones, the 5310 XpressMusic, featured the service. Nokia would offer a year's worth of music to its users free and charge users for it after that. Customers were allowed to keep all the music they already downloaded.

If successful, Nokia could be in a position to challenge Apple's iTunes hegemony in the music distribution business, said some analysts.

However, the service met with lukewarm reception in Europe. In the U.K. only one carrier partnered with Nokia to offer the service.

The company's problems with the service have been much greater in the U.S. Nokia stumbled in its launch of the 5800 XpressMusic phones after users complained of crippling connectivity problems with the device. Nokia pulled the U.S. version of the phone off its shelves and offered the handsets a few days later after a fix.

The company is now reportedly rethinking its strategy for the music subscription service in the U.S. Without subsidies from carriers such as AT&T and Verizon, American mobile phone users are unlikely to pay the high cost of handsets that are bundled with music. Nokia will also have to simplify the Digital Rights Management (DRM) issues in the service that could potentially cripple how users listen to the music before it is introduced in the U.S.

See Also:

Photo: Nokia 5800 XpressMusic phone (manu contreras/Flickr)