Nokia would like its phones and services to become a viable alternative to Apple's dominant iPod audio players and iTunes download service in the digital music business. It took an important step in that direction with the launch of the first Nokia Music Store, located in the U.K., last month.

Today, the cell phone and smartphone giant made a couple of new (and significant) music-related announcements.

Nokia has launched a beta of a new Internet radio service, aptly called Nokia Internet Radio, and inked a groundbreaking deal with the Universal Music Group to deliver free access to the world's largest music library on its music phones for a one-year period.

On The Internet Radio
With Nokia Internet Radio users can listen to Internet radio stations over their mobile devices, through either a packet data (cellular) or Wi-Fi connections. The service adjusts the bitrate of the audio stream depending on the bandwidth of your connection.

So you get higher quality streaming over Wi-Fi or a cellular-wireless HTMS/HSPDA 3G data connection than a much slower 2.5G EDGE connection, for example.

The service sports a large variety of stations and shows, including news, sporting events and music, according to Nokia. You can Browse for your favorite radio programs by genre, language, or country, or search by station name, as well as Explore the most popular stations and stay in touch with the mobile Internet radio community.

Nokia says it will embed Nokia Internet Radio in forthcoming Nokia Symbian OS/S60 3rd edition devices. Meanwhile, it is currently available as a free download to its N82, N91, N95, and Nokia N95 8GB smartphone models.

All-You-Can Eat Music
Beginning the second half of next year, Nokia will offer free music from Universal, the world's largest music group, on its music phones through a new offering called "Comes With Music."

The idea behind the agreement is to simulate demand for 'official' music downloads, take a significant swipe at peer-to-peer file sharing networks, and, of course, challenge Apple's digital download hegemony—both on the hardware (iPod) front and software (iTunes) side of the business.

With “Comes With Music” users will be able to download as much music as they like during the free 12 month period. When it’s over, they’ll even get to keep all the tracks they’ve downloaded—even though they've paid nothing outside the cost of the mobile handset itself and the usual data charges.

By contrast, with subscription services like Napster, where you pay a flat fee each month for unlimited music access, you lose all the tracks you've downloaded after you stop paying.

Click here for the full story at internetnews.com

Naomi Graychase of Wi-Fi Planet contributed to this story.