Nokia limps back into the U.S. with T-Mobile

The beleaguered handset maker isn't exactly putting its best foot forward in what should be its big comeback. Nokia needs a flagship phone, stat.

The white version of the Nokia Lumia 710, not exactly a flagship phone. Brian Bennett/CNET

commentary Nokia needed to make a big splash in its return to the U.S., so what does it do?

Nokia said today it is partnering with T-Mobile USA to deliver the Lumia 710 early next year. The Lumia 710 is better known as the lesser of the two smartphones the company introduced in October .

So let me get this straight: the former handset titan that badly needs another shot is debuting with the weakest nationwide carrier as its partner, using its middle-of-the-road phone as the kickoff device. Seriously?

Nokia needed to put its best foot forward with its first Windows Phone in the U.S. It needed a product that could stir up some excitement for the brand, not just for itself, but for Windows Phone as a platform as well. It needed to supply what Microsoft has badly coveted for its well-liked, but commercially challenged operating system: a true flagship phone.

Sorry, but the Lumia 710 isn't it.

Nokia faces a ton of challenges in rebuilding its presence in the U.S. Its brand here has faded from its dominant days a decade ago. Consumers, meanwhile, haven't exactly embraced the Windows Phone operating system on which the Finnish company has pinned its hopes.

Windows Phone has had its own rocky start. While critics have been kind to operating system's intuitive user interface and unique feel, consumers have been reluctant to jump on the Microsoft bandwagon. Its latest update, Mango, was similarly well received, but completely drowned out by the impending launch of the new iPhone 4S. Carriers, vendors and consumers who weren't obsessing over Apple had a slew of Android products to focus on.

Nokia and Microsoft, of course, could get it together and have its Lumia 800 out in a big way. Chris Weber, the head of Nokia's North American operations, hinted at a big presence next month at the Consumer Electronics Show, where many believe it will launch an LTE version of its Lumia 800 with AT&T. He added that the company plans to have a wide range of products in the U.S. CNET also reported that it is testing an LTE variant with both AT&T and Verizon , which signals some solid progress.

But that's all just speculation. For now, this isn't the most auspicious start for Nokia.

Wanted: a halo product Smartphones are no different than other products, from laptops to cars, and require a flagship, or halo, product to generate buzz and consumer awareness.

Nokia and T-Mobile argue the Lumia 710 will be its flagship product for the post-holiday season. But at $49.99, the Lumia 710 is admittedly a mass-market device with just average specs. Consumers, even those who are less inclined to care about technology, talk to each other and see the commercials blasted at them, and are influenced by the buzz that's out in the market. There's been no buzz for the Lumia 710.

The vendors that have seen the most success have been the ones will to showcase a powerful phone backed by a lot of marketing dollars. Motorola Mobility mounted its return on the back of the original Droid, a flagship Android device that Verizon Wireless pushed hard two years ago. Even now, there's no question what Motorola's flagship product is: the Droid Razr.

Samsung Electronics built its Samsung Galaxy S franchise in a different, but no less successful, way. It threw in the latest processor, memory and camera technology into a super phone, and made sure virtually every carrier had a crack at it. Thanks to Samsung's own marketing push and strong carrier support, the Galaxy S name is nearly as well known as Android.

That's been a problem for Windows Phone in general. You can't point to one device as its halo product. All are good phones, but none stands out and generates any level of excitement. The lack of carrier support is indicative of that.

Affordable phones are smart, in principle At $49.99, the two companies are going after the next wave of smartphone adopters: mainstream consumers who are less comfortable with latest gadgets and higher service plans. It's a sound strategy, to an extent.

While the midrange of the market offers the highest potential customer base, it's also brutally competitive. While the $49.99 price is enticing, it also puts the Lumia 710 in the range of a number of Android products at T-Mobile.

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Early in the Android game, another handset manufacturer attempted to go after the mass market with more affordable phones. LG Electronics pushed a number of devices that would retail with a $50 or $100 price tag in the hopes that price would win out.

Unfortunately, many of them got lost in the shuffle, and LG remains near the bottom of the totem pole when it comes to smartphones. LG is now attempting to push higher-end devices, including the high-definition LTE-powered Nitro HD for AT&T .

Not the ideal partner T-Mobile has had its own share of struggles recently. The carrier continues to hemorrhage its most valuable customers--the ones who are willing to sign long-term service contracts, and has more recently presented itself as more of a value player.

That, theoretically, should play well into the Lumia 710's price tag. Unfortunately, that $49.99 price tag requires a two-year contract, the exact thing T-Mobile customers are shunning.

In the third quarter, T-Mobile lost 186,000 contract customers, and saw most of its strength from the prepaid business. The company has also been distracted by the AT&T drama, and has been plagued by customer fear of a takeover.

The timing of the announcement is also a bit odd. With the phone coming out in January, it would have made more sense for Nokia to announce the device on a bigger stage at CES--particularly if it was able to nab AT&T as a partner for the Lumia 800.

I wouldn't be surprised if T-Mobile pushed Nokia to announce the phone early to avoid getting drown out by the sea of news at CES.

Which is a shame; Nokia announcing two phones with two national carriers on technology's largest stage would have better illustrated the company's comeback in a real way. Instead, it misses out on a big opportunity and we're left wondering just how serious Nokia is when it comes to the U.S. market.

 

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