Nokia revealed a new mobile phone capable of storing 3,000 songs on a tiny hard drive. The N91 phone is set to go on sale later this year and will compete directly with Apple's massively successful iPod music player.

"Every phone maker is now working on something similar -- it is a huge market."

Nokia claims the key to its music phone is that users can download new material wherever they are. Jonas Geust of Nokia said: "What sets the Nokia N91 apart is the fact that it is always connected -- you can download new music while on the move, add it to your favorite playlist and then share your playlist with friends."

The N91 has a normal phone keypad hidden under a set of iPod-like control buttons. However, experts say that dedicated music players still have a far better battery life, offering up to 30 hours' playback compared to the N91's 12.5 hours.