Nokia CEO talks of Windows Phone foothold in U.S.

LAS VEGAS--Nokia CEO Stephen Elop said this week's announcement of the company's first major Windows Phone for the United States is only the beginning in Nokia's long-term strategy to re-establish itself in the U.S. market.

For several years now, Nokia has largely been absent from the U.S. when it comes to smartphones. Despite its repeated promises to make a comeback in the states, the company has not been able to crack into the market with products that U.S. carriers are willing to subsidize and promote.

But Elop believes that's all about to change, thanks in large part to its relationship with Microsoft. On Monday, Nokia announced here at the Consumer Electronics Show the new Lumia 900. It's the first and only Nokia Windows Phone smartphone designed specifically for the U.S. market. It also happens to be the first Windows Phone with support for a speedy 4G LTE wireless network.

CNET sat down with Elop for an interview about the company's U.S. strategy and the new Lumia 900. Below is an edited excerpt of that conversation.

The Lumia 900 was supposedly designed specifically for the U.S. market, but what does that mean? Which features were more critical to U.S. consumers versus others around the world?

Elop: For one, LTE is really important in the U.S. And it's not as relevant right now in Europe, because there aren't as many commercial LTE networks deployed. But here in the U.S. LTE is the centerpiece. But adding LTE costs more, and it also impacts the design of the product. You need a bigger battery, which drives the size and thickness of the device.

But larger screens are also much more popular here in the U.S. than in other parts of the world.

Years ago, Europe and Japan were much more advanced than the U.S. But that's changed in the last 4 or 5 years. The U.S. is where we see much of the innovation and application development.

We also want to move the emphasis away from feeds and speeds. That's what we were trying to show during the event yesterday when we showed the camera. There are a lot of things you can do to improve the camera on a cell phone through the science of photography with focal length and aperture.

Aside from LTE, aren't many of the features of the Lumia 900, such as the camera and front-facing camera, also features that European customers would care about?

Yes, these consumers do care about these features. And we will have them available. This is a first step.

You mentioned battery life on LTE devices. That is the No. 1 complaint I hear from 4G LTE smartphone customers--that battery life on most devices is terrible. Will the Lumia 900 offer an improvement over the Google Android 4G LTE devices on the market?

We can't provide quantitative numbers on this. But our lab work and the work we've done with Qualcomm suggests that we have made improvements here. And we think the longer battery life on our devices will set us apart. It's still early days for LTE. And new technologies are always power hungry.

Many of our readers on the live blog were hoping to see more Lumia devices on more carriers. What do you think about that? When will we see more from Nokia here in the U.S.?

The Lumia 900 is not an entire portfolio. It was designed to be the first phone for the U.S. market and for AT&T specifically. It's the first Windows Phone smartphone with LTE. There will be more devices. And there already are more Windows Phone smartphones for the U.S. the Lumia 710 is available on T-Mobile. And Microsoft said last night at their keynote that they will sell the unlocked Lumia 800.

But if it was so important to launch the first major U.S. Nokia Windows Phone with LTE, why didn't you launch it on Verizon Wireless, which currently has the largest LTE deployment?

We made that decision based on historical relationships we had with AT&T. We've been working with them for a long time, and so has Microsoft. AT&T is the largest shipper of Windows Phone devices. Of course, we're building from a small base. But we see a lot of opportunity.

How important is it for you to get a Nokia Lumia phone on Verizon Wireless?

In the U.S. market there are two very large players, and of course they are both important.

How important is the U.S. market to Nokia?

The U.S. is very important. This is where the innovation and app development is happening, and it's being echoed around the world. So it's very important for us to participate and be right in the middle of the innovation. We need to compete here so that when the innovations developed here land elsewhere we aren't a step behind.

You've mentioned that LTE is very important in the U.S. market, and it will eventually be important elsewhere. But the frequencies that U.S. carriers are using for LTE are different than the frequencies used in other other parts of the world. And there was a recent report from the GSM Association that warned of a fragmentation issue. How does that affect Nokia as a device maker?

A similar thing happened when 3G was first deployed, and over time carriers around the world became more aligned. It's to their benefit to get commonality. But for us it's not an impossible technical problem. It creates more work for us. And it may be more expensive to build devices. But it can be done.

The bigger problem is around spectrum shortages. This is a problem that varies dramatically region to region. And different countries are handling it in different ways. I don't know how to solve the problem, but it does land in the price of products.

A lot of people have been wondering when Nokia will introduce a tablet with Windows 8. Can you offer any hints?

We haven't announced any plans for a tablet. But when you think of the broader digital experience, it's not just smartphones--but tablets and PCs are all participating in the marketplace. If you watched the Microsoft keynote Monday, you could see the emphasis they put on the live tiles and the user experience. That is a good thing for us. It's good that hundreds of millions of people will be introduced to that user experience through Microsoft's other products as well. And people are responding very favorably to that experience.