Report: Sony Ericsson to take on RAZR

The maker of the Walkman line of music phones is setting its sights on the popular Motorola RAZR phone and plans to launch an ultrathin competitor in early 2007, according to Reuters. Citing industry sources, Reuters reported that the joint venture Sony Ericsson will release a high-end Walkman camera phone called "Ai" in March 2007. Inspired by Japanese tennis player Ai Sugiyama, the sleek, candy bar-shaped phone will measure 9.4 millimeters in thickness, slimmer than the RAZR's 14 millimeters. It is expected to be launched in black and silver. Sony Ericsson declined to comment on the report. The company has seen its Walkman line of music phones surge in popularity in the past year, particularly in Europe.

Baidu.com wins record label lawsuit

In a surprising setback for the global music industry, Chinese search engine giant Baidu.com has won a lawsuit filed against it by the major record labels. EMI, Sony BMG, Universal Music Group, and Warner Music Group sued the site last year, saying it was illegally directing users to pirated music online and thus encouraging copyright infringement. But the No. 1 Intermediate Court of Beijing found in favor of Baidu, a move that stunned the International Federation of the Phonographic Industry, according to its chairman, John Kennedy. "I am amazed by this inexplicable judgment that is totally out of step with Chinese law," Kennedy said in a statement. IFPI said today that it would appeal the ruling. The case was originally filed in September 2005. IFPI estimates that 85 percent of all music in China is pirated.

Mercora strikes mobile distribution deals

Three-year-old peer-to-peer (P2P) radio service Mercora, which unveiled a wireless, over-the-air mobile media application for smart phones in late September, has signed distribution deals for that service, dubbed M. The company said this week it has signed deals with leading mobile entertainment content providers, including Handango, MobiHand, and Mobile & Wireless Group.

Those deals will incorporate M into more than 350 sites and storefronts. The distribution network includes mobile environments for Alltel, Amazon, AOL, BET, CBS, Cingular, Hewlett-Packard, Microsoft, Motorola, NBC, Palm, Samsung, Sprint, T-Mobile, Turner Broadcasting, and Verizon Wireless, as well as destinations like eXpansys and PalmGear. The M service is optimized for Windows Mobile Smartphone and Pocket PCs.

Qtrax inks licensing deal with Universal Music

Universal Music Group, the world's largest music company, licensed its music to Qtrax, the forthcoming legal, advertising-supported P2P service. Qtrax now has distribution arrangements with all the "Big Four" music publishers Sony/ATV, Warner Music Group, EMI, and now Universal. The company has also struck deals with independent licensers like the Orchard, GoDigital, as well as artists' organizations BMI and ASCAP. Qtrax says it plans to offer "unlimited" free downloads and pay royalties to copyright holders through advertising revenue.

"UMPG desires to be at the forefront of licensing legitimate new technologies and sites in an effort to maximize revenues for our copyrights, songwriters and artists," Universal Music Publishing Group CEO David Renzer said in a statement. "We believe that Qtrax and the legal P2P environment are an exciting new business model with great upside potential and we are pleased to have concluded this new arrangement with them."

Hearing aid maker says MP3 users have been a boon

Phonak, a Swiss maker of hearing aids, reported a 32 percent rise in first-half profit this week, saying that the widespread use of portable MP3 players has caused increased hearing loss among young people. "Due to the noise exposure, especially among the young, we are witnessing the creation of a hearing loss bubble in years to come," Phonak CEO Valentin Chapero said. Phonak's profit rose to 102.2 million Swiss francs ($82.2 million) on sales of 504.2 million, up 29 percent. The group expects to outpace the market in the second half, as growing demand from an aging population is joined by an increase in hearing problems among users of MP3 players such as Apple's iPod. Faced with a lawsuit abd backlash over possible hearing loss due to use of earbuds, Apple issued a software update earlier this year that will allow users to set a maximum volume level.