Nokia's U.S. challenge: Can it return to its past glory?

Although it has long been a marketshare leader in handsets worldwide, Nokia has struggled to be a powerful player in the U.S. wireless market. The Finnish company's difficulties in the U.S. can be attributed to a couple of factors. First, Nokia is a stalwart believer in GSM and the U.S. market is a CDMA stronghold. Secondly, Nokia has never wanted to allow U.S. operators to have ultimate control over the handset's inner workings, something other handset OEMs have had to do to gain the big contracts with U.S. carriers.

But Nokia says that its attitude is changing. At last week's Consumer Electronics Show in Las Vegas, I met with Mark Louison, Nokia's president of North America, to talk about the firm's strides in North America. Louison said that the company has finally realized that it needs to change the way it does business in the United States if it wants to compete. He added that over the past 18 to 24 months Nokia has managed to secure handset deals with several big U.S. operators including T-Mobile USA, AT&T Mobility and Verizon Wireless. And to get those deals, Louison said that the company has agreed to collaborate more closely with carriers--a big step for the firm.

Louison pointed to the Nokia 6650, an HSPA handset that launched last November with AT&T that features the carrier's customized user interface. The phone also has Nokia's Series 60 software. In addition, the company also has several handsets with T-Mobile USA, including the 7510--which features direct access to the MyFaves interface. Verizon Wireless currently offers several Nokia phones, including the mid-range priced Mirage. 

Nokia has yet to tap into the lucrative and competitive U.S. smartphone arena, which is where devices such as Apple's iPhone and RIM's BlackBerry Curve, Bold and Storm, as well as HTC's G1 have found success. "We have had some success at the low-end," Louison said. "But now it's time to move to the high-end."

But tapping into the high-end handset arena in the U.S. may prove much more difficult. Nokia is selling its E71 here unlocked without a carrier partner. While Louison said that the E71 is the "fastest-selling Qwerty device" worldwide, it's not likely to gain much traction in the U.S. without a carrier. The open distribution channel may be viable and growing, but it still takes carrier marketing dollars and distribution to really propel smartphone success. -Sue

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