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X7 Cancelled: Nokia Needs AT&T More Than AT&T Needs Nokia

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Nokia’s X7 smartphone, rumored to launch in AT&T stores next month with carrier subsidies and marketing, now appears to be cancelled in the U.S., according the Wall Street Journal (s nws). Citing “people familiar with the situation,” the Journal indicates that Nokia (s nok) made the decision because AT&T (s t) wouldn’t commit to enough marketing or subsidy dollars. But what appears to be a cancellation may be just a delay based on a Nokia statement received at AllThingsD:

“We are working hard with our U.S. carrier partners to bring meaningful smartphone solutions to market that are compelling consumer experiences, have strong operator support and a thriving ecosystem. As in any business, plans can change and deliberate decisions must be made to enable clear focus on bringing the right products to market at the right time.”

From the sounds of the statement, and given that Nokia hasn’t gained traction here in the U.S. with its Symbian devices, it appears to me that Nokia and AT&T couldn’t agree on the financial details of a carrier deal. Conversations may have ended a February launch, but Nokia appears open to revisiting a deal with AT&T — or perhaps the other big GSM operator, T-Mobile — to get its current high-end smartphones in front of consumers at a price competitive to iPhones (s aapl) and Android (s goog) handsets.

The situation, if true, also tells me that AT&T is confident enough with its current and planned phone portfolio. Yes, the carrier is losing iPhone exclusivity in a few short weeks, but AT&T has solid Android offerings including the new Motorola Atrix 4G (s mmi), which can fit in a laptop-like dock or pump 1080p video to a high-definition television set.

I actually had high hopes that Nokia would be able to work with AT&T to carry one of the new Symbian devices announced at Nokia World in September. A developer contest held by Nokia tipped off the possibility of a new Nokia device on AT&T, mainly because AT&T was a key sponsor. Now it looks like that plan has either fallen through or been postponed, at best. And that hurts Nokia because its Symbian devices aren’t subsidized, nor do they receive any marketing attention here in the States. This means most consumers don’t know about them, and when they do find out that Nokia has something to offer, they’re put off by prices of $500 or more.

Based on my prior conversations with key Nokia executives, I suspect this is just another set-back, and not a completely closed door. The U.S. market is extremely important to Nokia, I was told back in June by Niklas Savander, EVP and general manager of the markets unit at Nokia. If AT&T won’t play nice with Nokia, then perhaps the largest handset maker in the world in terms of sales can get T-Mobile to offer subsidized Symbian smartphones.

I think the devices have excellent hardware designs, but are lacking in usability. If Nokia can get a carrier to work with them, it will be up to U.S. consumers to pass their own judgment in a world of iPhones and Androids.

Image courtesy of Eldar Murtazin

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10 Responses to “X7 Cancelled: Nokia Needs AT&T More Than AT&T Needs Nokia”

  1. There was a short article written that Schmidt, CEO of Google, approached Elop (CEO of Nokia) if he would consider the Android operating system on Nokia hardware. Nothing came out of the brief conversation between the two. I guess NOkia Elop has something else in mind, Windows 7 maybe. I hope not!! Nokia hardware is an excellence jewel, but it needs a complementing ring to hold the jewel in place and to make it shine. The Symbian UI is outdated. I seriously think Nokia should give WebOS a look. Both WebOS and Nokia hardware are solid in their own right, but IMO I don’t think they can survive alone. They both need a companion to survive today. Marrying the two, WebOS and Nokia hardware, would be cloud 9 and could bring a different user experience, on the consumer and business level.

  2. The growing issue for Nokia becomes the ecosystem of the mobile OS. The US has five major mobile OS’s, Android, Blackberry, iOS, Palm, and Windows 7. As people pick an OS and they begin to purchases apps, it gets more expensive to move to a new platform. So while people may want to try a new platform, it can get expensive to do so assuming the apps they want or a comparable replacement exists on the new platform.

    I think the in near future as people choose a platform, they’re less likely to switch unless there is a very compelling reason. It gets harder for new entrants to the market to compete. If Nokia wants to be a player in the US market, they need to get their foot in the door ASAP but they can’t do that without carrier help. For Nokia there is no easy solution to crack the US market.

  3. Frank Sydenham

    The carriers should partner with Nokia.

    LG recently said that US carriers are desperate for non-Android handsets. Windows Phone 7 has failed (and was always destined to fail).

    However, Nokia’s coming MeeGo OS stands a better chance, and the US carriers should embrace it.

  4. Nokia needs to have a UI that is comparable – not necessarily better – to the iPhone and Android to compete in the US market and, quite simply, at the moment it doesn’t.

    That said, I don’t think it’s a matter for waiting for MeeGo, more a case of PR2.0 and PR3.0 because, despite its demonisation, Symbian is a very, very good mobile OS with a flaky and outdated UI. Get that right and the playing field becomes a lot more even.

    The timing isn’t right just now. If Nokia and AT&T released the X7 in February it would be absolutely savaged by the US blogs (the fact that half of them would never have seen it let alone used it is irrelevant). If they release it with a better UI then I don’t think it will be praised but it will avoid a lot of very negative publicity.

    This is a shrewd move by Nokia. I get the feeling under OPK’s reign they would have just have chucked it out without thinking it through. It seems to me this is a reflection of Elop’s much better understanding of the US market.

  5. Lucian Armasu

    I think Nokia has once chance and once chance alone. They can’t risk it with a Symbian based phone. Symbian hasn’t received great reviews from American bloggers especially, and I don’t think Americans in general are that excited about a Symbian phone either. It’s understandable why AT&T didn’t want to bet their money on it.

    If Nokia makes Meego great, then they should try again with N9, the first Meego phone. Maybe a US carrier will be willing to risk their money then. That’s Nokia’s best chance to impress Americans, as well. If they can’t do it with that phone, then it’s over for them in USA.

  6. I used to purchase unlocked Symbian devices a few years ago but due to the lack of developer support in the US, I’ve moved onto the Android ecosystem. Nokia has been quite stubborn in their efforts to woo the US market. They have excellent hardware, but their software is something to be yearned for. I wonder how they’d fare if they would keep their hardware and put Android on their phones – then how would they do?