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

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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