Nokia said on Tuesday it has reached an agreement to acquire Loudeye, which provides a music distribution platform that powers a number of music stores in Europe, including MSN Music. The leading phone maker will use Loudeye technology to launch its own mobile music service.

Claiming it is the largest manufacturer of digital music players, Nokia sold 15 million music-enabled phones in the second quarter. The company plans to roll out the new music service in 2007, which will specifically take advantage of Nokia Nseries multimedia phones. Loudeye currently offers its technology in 20 countries and boasts a library of 1.6 million songs. The deal is valued at $60 million and is expected to close in the fourth quarter.