Microsoft Store offers Lumia 520 and 12 months Xbox Music for $99 (US)

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The Microsoft Store (online and retail) in the US is offering a special bundle of the the Nokia Lumia 520 (AT&T) or Lumia 521 (T-Mobile) and a 12 month Xbox Music Pass for $99, a saving of around $100 over the full price. The way the offer is structured essentially offers a free phone when you buy a 12 month Xbox Music Pass, but you can also see this the other way round (a free music pass when you buy a phone).

The special offer will be available until February 17th and is limited to one bundle per customer. The devices are also locked to their respective carriers (i.e. must be unlocked or used with AT&T / T-Mobile or MVNO running on one the networks).

This kind of service and phone bundling is something we expect to see a lot more of once Microsoft completes its acquisition of Nokia's Devices & Services business this quarter. It's one of the way Microsoft could opt to lower the total cost of ownership of a phone, while at the same time encouraging users to try new services and products. For example, it is possible to foresee a home-office bundle that includes a phone, subscription to Office 365, Skype calling subscription, and extra SkyDrive / OneDrive storage space. 

Here's how Microsoft describe the Xbox Music Pass:

Your Xbox Music Pass lets you search for and play music from one of the largest digital music catalogs on the planet. Discover new releases or groove to your old-school favorites—it's all there. With 30 million songs, you could listen for over 80 years and never hear the same song twice.

With an Xbox Music Pass you can either stream any track you wish to listen to (à la carte streaming), or you can download the track for offline listening. It is similar to services such as Spotify, but is more tightly integrated into the native Windows Phone music applications (i.e. Music Hub). It can be used across multiple devices (phone, PC, web, tablet) and includes support for play list and favourite synchronisation.

520 bundle

In a recent editorial we asked whether now was a good time to buy a Lumia 520 in view of the fact that a new series of low end Lumia device might not be far away. Price is a big factor here and if you were planning to get an Xbox Music Pass in addition to a new phone then the bundle described above offers excellent value for money:

So is it a bad time to buy a low end Windows Phone device? If you're likely to suffer from buyer's remorse when the next generation of low end devices comes out, then the answer is probably yes. Otherwise, I have to say no, because a combination of low pricing, increasing app availability, and the prospect of an upgrade to Windows Phone 8.1 means that the Lumia 520, 620, and 720 have never been better value for money. Of course, they may be even better value for money once their successors are announced... and it is a maxim of the smartphone world that there's always something just a bit better around the next corner!

And here's the conclusion to our Nokia Lumia 520 review, which we published last April:

Taken holistically, though, the Lumia 520 is still cracking value for money, in terms of the future proof operating system, the built-in Office suite, the mapping and navigation services, the 150,000 third party applications available in the Windows Phone Store, and (as highlighted above) even the built-in camera.

The more Nokia push Windows Phone down into this price territory, the better it will do, I suspect - budget Android phones tend to be slow and clunky, whereas the 520, on the whole, flies. And with greater sales at the budget end will come market share increase and revenue, increasing awareness further up the price spectrum. Assuming that Windows Phone continues to grow, I suspect we'll be looking back in a year's time and realising just how much the Lumia 520 and 620 had to do with the ecosystem taking off across the world.