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The situation from Nokia may have just gone from bad to worse

Fresh off not as bad as expected earnings, Nokia, Oyj. (HEL:NOK1V) is preparing to launch Windows Phone 7.5 "Mango" handsets at the annual Nokia World conference in London.  That lineup is expected to include the "Sea Ray"/"Sun" and the Nokia 800, a WP7.5 version of the slick iPod Nano-esque N9.

But disturbing news arrived this week from U.S. advertising blog AdAge, which revealed that Nokia and its partners had been shopping around a troubling document while looking for a U.S. ad agency.  That document revealed that Nokia would likely not launch a handset in the U.S. at all in 2011.

Previously Nokia had always suggested that there would be some product in the U.S. by the end of 2011.  It had used phrases like "limit availability" to characterize this lower volume launch and labeled 2012 the time frame for the "full launch".  But again, there was always the assumption that the company would deliver at least some product, in order to excited customers in the lucrative U.S. market.

If true, this is a major blow to Microsoft Corp.'s (MSFT) hopes to grow market share in the U.S.

It's also evidence of Nokia's ongoing struggles in the U.S. both in sales and at a corporate level in adapting to U.S. carriers' business model.  Unlike many foreign regions where handsets are sold at-cost unlocked, U.S. carriers tend to rely on subsidized locked handsets.  Those subsidies add an extra wrinkle of complexity for handset makers, as they now must appeal to both the customer and the carrier.

Still, it's unacceptable that Nokia has been unable to master this slightly different business model, particularly when its non-U.S. peers like Samsung Electronics Comp., Ltd. (SEO 005930) have done so with ease.

If Nokia indeed delivers its product payload in early 2012, it will not only miss the lucrative holiday shopping season, it will also be delivering already dated hardware onto the ultra-competitive American market.  That may be a death sentence to Nokia's hopes of being a strong competitor in the U.S.

It's already simply dumbfounding that Nokia is the flagship partner of Microsoft's Windows Phone 7 project, yet it has been unable to bring smart phones to market as fast as other WP7.5 manufacturers.  Now the situation may be about to go from bad to worse.

Source: AdAge

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Not THAT surprising
By RevLuck on 10/25/2011 9:42:28 AM , Rating: 2
The "highly competitive" US market that got SGS II about half a year later than everyone else.

US carriers always want custom versions and I bet it is a pain in the ass to deliver.

RE: Not THAT surprising
By KPOM1 on 10/25/2011 2:49:32 PM , Rating: 2
It was about 4 months later. That said, the US is always first to get new iPhones, and several prominent Android phones debuted in the US (e.g. Motorola Droid/Milestone, Google Nexus One, Samsung Nexus S). Granted, the Nexus models aren't customized, but the Droid was.

It also is surprising since one of the stated reasons for hiring Elop and switching to WP7.5 was to attract the US market, which has eluded Nokia for several years now. Back in the late 1990s and early 2000s, they were actually #1 in the US after Motorola stumbled.

As weak as T-Mobile is, and with their deal with AT&T in doubt, Nokia should have been able to strike a deal with them, perhaps to release a "Nexus"-type device (i.e. no customization) at least to get a decent Windows Phone out to demonstrate. HTC has a Windows Phone at T-Mobile. Microsoft is trying to limit carrier customization, anyway, so really it's just a matter of striking a standard subsidy deal.

RE: Not THAT surprising
By jimbojimbo on 10/25/2011 3:36:21 PM , Rating: 2
Does the Verizon iPhone get a bunch of Verizon apps that suck ass, start automatically, and you can't uninstall? Nope. That's why it's so easy. Verizon can go ef themselves for wasting space with all their crap. Thank goodness for root.

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