T-Mobile to launch Nokia Lumia 710, but analysts say more is needed

As expected, Nokia (NYSE:NOK) teamed with T-Mobile USA to launch its first U.S. smartphone running Microsoft's (NASDAQ:MSFT) Windows Phone software, the Lumia 710, marking Nokia's re-entrance into the market after years of having a negligible U.S. presence in smartphones. 

nokia lumia 710 t-mobile

Click here for pictures and specs of the Nokia Lumia 710.

T-Mobile will launch the Lumia 710 on Jan. 11 for $49.99 with a two-year contract and after a $50 mail-in rebate. The aggressive pricing is part of what Nokia and T-Mobile hope will make the device so appealing, especially to first-time smartphone buyers, which the companies indicated are the target audience for the Lumia 710. Nokia and T-Mobile are expected to formally unveil the device at a launch event in New York City tonight. 

For Nokia, the stakes are high as the company tries to re-establish brand awareness in the United States and make its months of investment in the Windows Phone platform pay off. T-Mobile, which is still operating as an independent business as AT&T (NYSE:T) decides whether to continue with its proposed $39 billion acquisition, gets the chance to shine as Nokia's premier partner--for now, at least.

In an interview with FierceWireless, Chris Weber, Nokia's president of North America, said working with T-Mobile represents a "greenfield of opportunity" to target first-time smartphone buyers. "We feel very good about this device because it's a value play targeted at feature phone customers," he said. "If you look at the sweet spot T-Mobile plays in, it's right in the heart of that sweet spot."

At the same time, he said Nokia still intends to eventually offer "a portfolio of devices in the U.S. at different price points for different user experiences, across multiple operators." He declined to discuss what other operators Nokia is working with, but a recent CNET report indicated that both Verizon Wireless (NYSE:VZ) and AT&T are testing LTE versions of Nokia's high-end Lumia 800 smartphone. (Currently, Windows Phone does not support LTE.)

The Lumia 710 runs on Windows Phone Mango and sports a 1.4 GHz Qualcomm (NASDAQ:QCOM), Snapdragon processor, 3.7-inch AMOLED ClearBlack display, Carl Zeiss optics in its 5-megapixel camera, HD video playback and 8 GB of internal memory. The device will support HSPA+ connections of up to 14.4 Mbps on T-Mobile's network.

Just like the European versions of Nokia's Lumia devices, T-Mobile's Lumia 710 will come preloaded with Nokia Drive, the company's turn-by-turn navigation service, as well as ESPN Hub, a unique app that provides scores, video and other in-depth sports information. Weber said that right now the Lumia 710 will not ship with Nokia Music, an app that gives users playlists they can customize via a service called Mix Radio that offers hundreds of streaming, locally relevant music channels. He said that Nokia is still working on the technical details and getting content arrangements in place for the U.S. market and hopes to have the app available to U.S. consumers as soon as possible.

Weber declined to discuss how much Nokia intends to spend in the United States on Windows Phone marketing but said it will be a "significant" amount of money through online, TV and retail stores. He said the goal will be to both highlight specific devices and build up Nokia's brand in general.

Andrew Sherrard, T-Mobile's senior vice president of marketing, told FierceWireless that Windows Phone is less complex than Apple's (NASDAQ:AAPL) iOS or Google's (NASDAQ:GOOG) Android, and pointed to Windows Phone's People Hub as an example of a built-in software function that brings together multiple information feeds without users having to think about it or open multiple apps.

"Relative to other operating systems, the Windows Phone is much simpler and more curated, and that allows for a simpler and easier out-of-box experience for new smartphone users," he said. Both Weber and Sherrard also said that T-Mobile sales representatives are being educated on the unique aspect of Windows Phone and will be incentivized to highlight the device in T-Mobile stores.

Weber acknowledged that Nokia must re-establish its brand in the United States, and that the company's partnership with T-Mobile represents just a first step in the process. "I think Windows Phone is such a differentiated product," he said. "I don't think that story has been told in a compelling way, particularly by the OEMs. I'd rather have a differentiated product and have to tell that message."

Analysts were generally positive on Nokia's deal with T-Mobile, noting the Lumia 710 would likely appeal to first-time smartphone buyers, but said it would be a mistake to regard the Lumia 710 as Nokia's true re-entry into the U.S. market. "This is more opportunistic for Nokia," CCS Insight analyst John Jackson said. "The channel is subscale and I do not think this is the product or the products that are going to carry Nokia in the U.S. market going forward. They need either AT&T or Verizon, or preferably both, to go big with at least one product."

Current Analysis analyst Avi Greengart praised the Lumia 710 itself, Windows Phone as a platform and the strategy of going after "people who have not yet decided they are iPhone people or Android people." However, he said  Nokia faces an uphill battle by partnering with No. 4 carrier T-Mobile, which has been losing postpaid subscribers, and by re-introducing a platform that most U.S. customers are still unfamiliar with. "It would actually be significantly easier if Nokia were to come out with a dramatic, splashy device that says, 'This is Windows Phone done right.'"

For more:
- see this release
- see these press pics

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