Nokia Picks Wrong Carrier for U.S. Return

Nokia (NYSE: NOK) has returned to the U.S. smartphone market. Unfortunately, its partner is also-ran wireless provider T-Mobile. That will make it very difficult for the smartphone to get adoption.

Experts already have questioned why Nokia would launch its cheap Lumia 710, which will sell for $50, with a T-Mobile subscription. The handset company’s flagship Lumia 800 will not be released for several weeks.

The Lumia should compete with the Apple’s (NASDAQ: AAPL) iPhone, Research In Motion’s (NASDAQ: RIMM) BlackBerry and several Google (NASDAQ: GOOG) powered smartphones. Most of these products have relatively sophisticated interfaces and features. The low-end Nokia product is hardly competitive.

Another drawback the Nokia phone faces is that it runs on the Microsoft (NASDAQ: MSFT) Windows OS. That software has not been widely adopted. The alliance between Nokia, the world’s largest handset maker, and Microsoft, the world largest software company, is the best hope either has to take share in the rapidly growing smartphone sector.

Nokia also has decided to, or perhaps was forced to, release the phone with T-Mobile. The carrier is number four in the market behind AT&T (NYSE: T), Sprint-Nextel (NYSE: S) and Verizon Wireless. AT&T is supposed to acquire T-Mobile, although the government has blocked the $39 billion deal. T-Mobile clients already are concerned about their futures. That hardly makes them an ideal target market for a new product.

Microsoft has the capital to have pressed AT&T or Verizon Wireless to be the launch partner for the Lumia. It could certainly have paid enough to make the release of the product on their networks financially attractive. For some reason that did not happen.

Nokia has released the Lumia, a potentially weak product, with the weakest large wireless company in the U.S. That means the smartphone has little hope of a future.

Douglas A. McIntyre