Nokia closing U.S. flagship stores

Nokia said it will close its flagship stores in the United States as part of a broader revamping of its retail strategy. The news comes days after Nokia announced it would close one of its two flagship stores in London. The company has 12 flagship stores worldwide.

Nokia flagship store in New York CityThe company will close its stores in New York City and Chicago in early 2010. In addition, the company is looking for a new location for its flagship store in Sao Paolo, Brazil. In explaining the decision, Nokia said 90 percent of phone purchases in North America are made through wireless carriers. Thus, the company said it would continue to work with operators as well as retail partners such as Amazon.com and Best Buy.

"The flagship stores were originally conceived to inspire and educate consumers to the benefits of mobility through an innovative retail experience, and to broaden the appeal of the Nokia brand," the company said in a statement. "Since opening the stores in New York and Chicago (in 2006), consumer awareness in the U.S. has grown substantially."

Analysts appeared largely unsurprised at the news. "There is no reason for Nokia to have the flagship stores--they cost too much compared to the value they create," John Strand, an analyst at Strand Consult, told Reuters. "Flagship stores are important in fashion industry: Apple is fashion. Nokia is consumer electronics."

Though it is the undisputed world leader in handset market share, Nokia has struggled to find success in the United States. However, this year Nokia has deepened its relationship with AT&T Mobility, and Verizon Wireless also has launched several of its devices.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article

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