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* TECHNOLOGY
* MARCH 21, 2011
By CHRISTOPHER LAWTON And SHAYNDI RAICE
Nokia Corp. is set to roll out a new smartphone with T-Mobile USA, aiming to
keep at least a toehold in the U.S. market while working up the new line of
devices on which it has bet its future.
Nokia, long the world's largest seller of mobile phones but losing the
smartphone race to Apple Inc. and Google Inc., embarked on a major strategic
shift in February with plans to dump its homegrown Symbian operating system
and develop phones based on Microsoft Corp. software.
But the firm says those new phones won't ship in large volumes until next
year, so it needs to keep nursing Symbian devices along to avoid falling out
of the lucrative smartphone market.
The Finnish company will launch the C7 smartphone based on the Symbian
operating system with T-Mobile USA, say people familiar with the matter. (On
Sunday, AT&T Inc. said it was buying T-Mobile for $39 billion from Deutsche
Telekom AG.)
Nokia's new chief executive, Stephen Elop, has pledged to continue investing
in Symbian through the transition to Windows-based phones. Analysts say the
company can't just sit on its heels given Symbian's still large user base
and developer support.
Symbian was the largest smartphone platform globally until the fourth
quarter, when it was passed by Google's Android operating system, shipping
on a third of smartphones globally to Symbian's 31%, according to research
firm Canalys.
Charles Golvin, principal analyst with Forrester Research Inc., says Nokia
has to do everything possible to make its Symbian developers feel loved so
it can get them to develop applications for it Windows Phone 7 smartphones
down the line.
"There is an element here of just maintaining momentum in the market," he
said. "They have to continue to be seen as a player, even if the software
platform they have isn't altogether competitive."
A Nokia spokeswoman declined to comment.
The landscape of the handset market has changed rapidly, with users of
ordinary mobile phones trading up to smartphones at a rapid pace. Nokia is
failing to keep up with buzz generated by Apple and Google, and has failed
to make much of a dent in the U.S.
Nokia faces a number of challenges in the U.S. Many users see Symbian as
unappealing compared to the iPhone and other smartphones, something Mr. Elop
acknowledged last month in London.
Operator support is another hurdle. Nokia is in a poor position to negotiate
subsidies and marketing support for Symbian smartphones, as it is
abandoning the platform for Windows.
Nokia recently canceled the U.S. launch of its X7 smartphone, which ran its
Symbian software, after not receiving enough marketing and subsidies support
from its intended carrier, AT&T Inc. Nokia launched its higher end N8 late
last year without carrier support in the U.S., hindering its chances of
finding many users.
Nokia started shipping the C7 world-wide in October at an estimated €
335, or $475, before taxes and subsidies. During Nokia's fourth-quarter
analyst call, Mr. Elop mentioned the C7 as one of a number of new Symbian
launches that helped contribute to the over five million new devices it
shipped in the quarter.
William Stofega, analyst for IDC, says Nokia's success will depend on the
pricing and how much marketing and sales support T-Mobile will give the C7,
especially in its stores.
"Are they going to compete head to head with Apple, I don't think so, but if
they can price right, that could be a pretty interesting offer," says Mr.
Stofega.
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