Nokia isn’t confirming cancellation of the X7 launch on AT&T. Nor is it willing to comment on reports this week that is also scrapping the Nuron 2 for T-Mobile. The Wall Street Journal last week reported on the X7, citing people familiar with the matter, and PocketNow reported the Nuron 2 scrub.
Take the reports for what they’re worth, but if true, it would appear that recently appointed CEO Stephen Elop is retreating from one of his company’s biggest objectives: to improve relationships and strengthen partnerships with carriers in the United States.
I scratch my head. Why is it that one of the world’s largest cell phone manufacturers cannot get it together for even a single smartphone launch with a major carrier in the United States? This is a company that controls a little less than a third of the worldwide market share. This is a company with vast resources, considerable talent, high quality standards and still it shies from creating partnerships in one of the richest, albeit most competitive, smartphone markets on the globe.
And perhaps it’s just that competition that has tempered Nokia’s enthusiasm for jumping into the ring with some major heavyweights. Competition in the United States’ high-end smartphone market is second to none. Between HTC, RIM, Samsung, Motorola and Apple, you pretty much have to come to market with a device that at least matches price and specs of the rest of the pack. As it stands, without subsidies, an unlocked Nokia N8 at $469 simply does not look like a deal to the average American consumer.
Any OEM that aspires to square off against a Droid Bionic or an iPhone 4 has to have a display technology that inspires awe, a UI that makes people want to touch your device and a deep catalog of apps presented in a storefront that comes at least close to the App Store and Android Market’s level of usability. With all the low-cost Android devices being pushed here in the States, as well as a $50 iPhone 3GS, Nokia might be thinking twice about how the X7 will fare, even with subsidies.
And then there are the networks. Nokia has always bemoaned the complexity of bringing phones to the United States for the fragmented CDMA/GSM infrastructure that exists across carriers. It’s no secret why T-Mobile and AT&T, both GSM carriers, were first on Nokia’s list of U.S. partners. Depending on how you look at it, things just got a little more complicated with the emergence of LTE, WiMAX and HSPA+. This country is on the cusp of redefining what decent network coverage and speeds really mean.
When you’re already losing market share, as well as reporting losses, why tackle the biggest opponent out there and in a tumultuous climate to boot? Throw in the fact that AT&T’s iPhone exclusivity just ended and one might consider the fact that Nokia has decided to stand down, at least until the U.S. market figures out how these changes will affect the entire ecosystem. In the meantime, why not send that considerable talent pool back to the ice caves of Finland to develop something that will impress an American audience?
Entering the U.S. market right now on either T-Mobile or AT&T with anything less than perfection could be disastrous for a phone maker that already suffers from a reputation in the United States as a maker of cheap, although high-quality, bar phones. Even if subsidies were able to bring down the cost of the X7 or N8 down to $199, it’s still going up against a bevy of equally-priced smartphones that beat Nokia’s specs by a country mile.
There’s no doubt that Nokia will eventually have to put forth a challenger in the United States if it intends to become anything more than a footnote in this country’s wireless industry. Nokia has built an impressive business around providing feature phones for emerging economies. Globally, it is one of the most trusted brands on the planet and that’s one of the main reasons Nokia isn’t going anywhere anytime soon.
The CEO switch from Olli-Pekka Kallasvuo to Elop was the most concrete evidence to date that Nokia is ready to forge a new path. I don’t doubt for a second that Nokia believes that new path heads West. However, I think Elop is waiting to do it the right way. Given Nokia’s reputation for quality, I can’t imagine it would bring a carrier-branded smartphone, and all the advertising that goes along with such partnership, to the United States unless that device was anything but its best. In short, I don’t believe that the X7, the N8 or Nuron 2 are the best that Nokia can do and neither does Nokia.