AT&T in Discussions to Carry Nokia Windows Phone, Lurie Says

AT&T Inc. (T), the second-largest U.S. wireless carrier, said it is in talks to start selling Nokia Oyj (NOK1V)’s Windows Phone smartphones next year, a boon for the handset maker as it seeks to increase sales in the country.

The carrier is working on completing the details of the agreement, Glenn Lurie, head of Dallas-based AT&T’s tablets unit, said today.

“We look at every promotional period separately and decide what we’re going to spend our dollars on and what we’re going to put our efforts in,” Lurie said in an interview during a conference organized by Morgan Stanley in Barcelona. “But nothing to announce there on that yet.”

Nokia plans to re-enter the U.S. market early next year with handsets on multiple carriers, Chief Executive Officer Stephen Elop said this month. The Espoo, Finland-based company, facing competition from Apple Inc. (AAPL) and Google Inc., is counting on Microsoft Corp. (MSFT)’s Windows Phone software after struggling to sell devices based on its own 10-year-old operating system.

Microsoft, based in Redmond, Washington, renewed its play for smartphones with the Nokia alliance aimed at producing a range of products and services that compete with Apple’s iPhone and devices that run Google’s Android software.

Android is the top-selling smartphone system worldwide with a 52.5 percent market share last quarter, followed by Nokia’s Symbian and Apple’s iPhone, according to Gartner Inc.

‘Acting Skittish’

“The carriers are acting skittish and I think AT&T may not want to give Lumia a Christmas season slot,” said Tero Kuittinen, an independent industry analyst in New York, referring to the Windows Phone handset Nokia unveiled last month. AT&T will probably start selling Lumia in the first quarter, Kuittinen said.

AT&T also plans to bring back subsidies for some tablet computers as prices are set to decline.

The carrier intends to offer Samsung Electronics Co. and Acer Inc. (2353) tablets with discounts as part of a two-year contract.

“Tablets are a big ticket item, but I don’t think that will be the case next year,” Lurie said. “You are going to see prices come down.”

AT&T is seeking to reduce prices for tablets as it broadens the range of devices amid intensifying competition from manufacturers. U.S. carriers had previously sought to offer subsidies before the introduction of Apple’s iPad.

Microsoft’s Windows and Windows Phone software will face tough competition from Apple and Android in smartphones and tablets, Lurie said.

Windows 8 is “potentially a very good addition to the tablet business,” he said. “You look at Microsoft and they own the desktop. They’ve got an advantage there.”

AT&T shares slid 1.6 percent to $28.78 in New York today. The stock has declined 2 percent this year.

To contact the reporters on this story: Jonathan Browning in Barcelona via jbrowning9@bloomberg.net; Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Peter Elstrom at pelstrom@bloomberg.net

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