Report: Nokia scraps plans for X7 smartphone with AT&T

Nokia (NYSE:NOK) cancelled plans to release a Symbian smartphone, the X7, exclusively through AT&T Mobility (NYSE:T) this year, according to a report in the Wall Street Journal. The unconfirmed decision represents a setback in Nokia's plans to regain U.S. market share, and could reflect friction in Nokia's relationship with its most important U.S. carrier partner. 

The report, which cited unnamed sources familiar with the matter, said the companies had planned to unveil the X7 ahead of the Mobile World Congress trade show next month in Barcelona, Spain, but that Nokia pulled the phone because it felt that AT&T would not give the X7 enough marketing and subsidy support. Nokia, the world's largest handset maker by volume, still plans to release the device in other markets. Reuters also reported that Nokia pulled out of the deal with AT&T, the nation's largest GSM carrier.

Mark Siegel, an AT&T spokesman, declined to comment. Laurie Armstrong, a Nokia spokeswoman, said the company does not comment on market speculation or its plans with operators. "That said, it is well publicized that we are working to regain leadership in the U.S. market and we are in active discussions with our operator partners on that strategy," she told FierceWireless. "We look forward to bringing meaningful solutions to market together with our operator partners and when we have something to announce, we will do so."

If true, the news represents another blow to Nokia's attempts to compete against Apple (NASDAQ:AAPL), Research In Motion (NASDAQ:RIMM) and a variety of devices using Google's (NASDAQ:GOOG) Android platform powered by the likes of Samsung, HTC, LG and Motorola Mobility (NYSE:MMI).

Nonetheless, Nokia's reported reluctance to rely on support from AT&T may be justified. AT&T, which just lost its exclusive hold over the iPhone to Verizon Wireless (NYSE:VZ), intends to launch a dozen Android phones this year, and is the flagship U.S. carrier for Microsoft's (NASDAQ:MSFT) Windows Phone 7 platform. The carrier also offers a range of RIM's BlackBerry gadgets.

Nokia has worked diligently to build stronger relationships with U.S. carriers, and last year Nokia and AT&T launched a developer competition that targeted apps created for Nokia's Symbian-based N8 smartphone. T-Mobile USA also launched the Nokia Nuron smartphone last year. Nokia, however, was not able to get U.S. carrier support for its flagship N8; the phone is on sale at Nokia's website for $469, down from $549 when it launched in the fall.

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

Related Articles:
Analysts: Nokia to take Q4 hit, but Symbian phones see strong demand
T-Mobile USA's Nokia Nuron to preload Ovi Maps
Nokia promises new smartphone UI paradigm with MeeGo
Nokia to take control of Symbian platform development
Nokia taps Qt as its sole app development framework
Nokia to slash 1,800 jobs after beating Q3 estimates

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