Nokia Re-Enters U.S. Smartphone Market as T-Mobile Offers Lumia

Nokia Oyj (NOK1V) is re-entering the U.S. smartphone market as T-Mobile USA Inc. said it would offer the Lumia 710, the country’s first Nokia phone to run Microsoft Corp. (MSFT)’s Windows Phone software.

The device, targeting first-time smartphone buyers, will cost $49.99 after a $50 rebate and with a 24-month contract, the companies said in a statement today. The device is scheduled to be unveiled at a media event in New York today and will be available Jan. 11.

Nokia, under Chief Executive Officer Stephen Elop, is remaking its smartphone business around the Windows Phone operating system after losing market share to Apple Inc.’s (AAPL) iPhone and devices that use Google Inc.’s (GOOG) Android operating system. Nokia will introduce Windows Phones with “multiple carriers” in the U.S., Elop said in an interview last month.

A low-priced phone at the nation’s fourth-largest carrier may not be seen as an impressive debut for Espoo, Finland-based Nokia, said Tero Kuittinen, an independent analyst in New York.

“It’s somewhat disappointing that AT&T is not the first U.S. partner,” said Kuittinen. AT&T Inc. (T), which has offered to buy T-Mobile, the U.S. arm of Deutsche Telekom AG (DTE), is in talks to sell Nokia Windows phones next year, Glenn Lurie, head of AT&T’s tablets unit, said last month.

Nokia is aiming the T-Mobile offering at people who have so far avoided smartphones on concerns that they cost too much and are too complex, said Chris Weber, who heads operations in the Americas. Users will get unlimited calls to a “concierge” line to help them set up the device and adapt it for their needs.

The device is also just the beginning of Nokia’s effort in the U.S., he said.

‘Rolling Thunder’

“We will be launching a portfolio of devices in the U.S. across a range of price points, user experience and operators,” Weber said in an interview. The rollouts are referred to internally as “Operation Rolling Thunder,” he said.

At the Consumer Electronics Show in Las Vegas starting Jan. 10, “we’ll have a very large presence and it’ll be clear that Nokia is back in a quite strong way in the U.S.,” Weber said.

Weber has overseen the company’s establishment of a new U.S. headquarters in Sunnyvale, California, as Nokia shuttered its White Plains, New York, head office. He’s a former Microsoft vice president who joined Nokia on Feb. 11 when Elop announced the partnership with Microsoft. He will be also in charge of sales in the Americas beginning Jan. 1.

The Lumia 710, which is the lower-priced of two models announced on Oct. 26, began shipping in Asia this month with a base price of 270 euros ($350). The higher-priced Lumia 800 is being sold in Europe first for at 450 euros.

To succeed in the U.S., Nokia will need to expand the availability of phones to carriers such as AT&T and Verizon Wireless, the country’s two largest, said Roger Entner, an analyst with Recon Analytics in Dedham, Massachusetts.

“It’s certainly a warm-up,” said Entner. “The big entry is when they do this with LTE on Verizon and AT&T,” he said, referring to long-term-evolution technology.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net; Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.