Nokia, Microsoft Take Wraps Off Windows Phone for AT&T

Nokia Oyj (NOK) and Microsoft Corp. (MSFT) introduced their first high-speed Windows Phone for AT&T Inc. (T) at the Consumer Electronics Show, aiming to help both suppliers stage a comeback in the smartphone industry.

The model, the Lumia 900, will be available in coming months exclusively from AT&T, the second-largest U.S. wireless carrier, the companies said at an event in Las Vegas yesterday. The handset will be one of the first Windows-based phones to use the next-generation technology known as long-term evolution, or LTE. Nokia didn’t give the sales date or price details.

AT&T is the biggest U.S. carrier to announce a Nokia Windows handset, making the agreement vital for Microsoft, which saw disappointing initial orders for phones based on its software. Nokia is counting on Windows to revive sales in the U.S. and help it win back share. The company sees the new model as the linchpin to attracting more developers and other partners to the platform.

“The Lumia 900 is not only about a great device, but it’s also about inspiring a great ecosystem,” Nokia Chief Executive Officer Stephen Elop said at the event. “An ecosystem is more than just the apps. It’s more than the device. It’s more than the operating system.”

Elop appeared onstage with Microsoft CEO Steve Ballmer and Ralph de la Vega, president of AT&T Mobility. The Lumia 900 will be available in black and cyan, with a 4.3-inch (10.9- centimeter) display. It has cameras with wide-angle lenses on the front and back, and voice-enabled driving navigation.

Best So Far

“The Lumia 900 is probably the best device that has carried Windows Phone so far,” said Al Hilwa, an analyst at IDC in Seattle. “This is a hot device. The issue is how quickly they can get it here. The market is moving at an incredible velocity.”

HTC Corp. (2498) also announced an LTE Windows Phone yesterday, the Titan II. The Taiwanese handset maker, which is trying to recover from its first quarterly profit decline in two years, expects the model to be available in coming months via AT&T.

In a separate keynote speech, Ballmer promoted Nokia devices, showing co-host Ryan Seacrest his own Nokia Lumia phone -- with a missed call from Microsoft Chairman Bill Gates.

Ballmer also announced that Microsoft has sold 66 million units of its Xbox video game console, as well as 18 million of the related Kinect sensors, which allow users to play games with body motion. Kinect, along with accompanying software, will go on sale for Windows personal computers on Feb. 1, the company said yesterday. The Windows version will cost $249, with an academic model available later in the year for $149.

Xbox Live

The company’s Xbox Live online gaming and entertainment service now has 40 million members. To bolster that feature, Microsoft plans to add content from News Corp. (NWSA)’s Fox, with programs such as “Glee,” “House,” “New Girl,” and “The Simpsons,” as well as Fox News and the Wall Street Journal’s video content.

XBox Live users will have to confirm they pay for television in order to receive the programming, a process also known as authentication, and the service requires a $5 monthly fee that goes to Microsoft. News Corp. didn’t specify which pay- TV operators have made agreements for content to be carried on the service.

‘Innovative Environment’

“As we continue to find new ways to deliver content to consumers, this partnership with Xbox Live enables our viewers to experience News Corp.’s leading media brands in an entirely new and innovative environment,” News Corp. Chief Digital Officer Jon Miller said in the statement.

At AT&T, the carrier is expanding its LTE network and adding devices to catch up with larger Verizon Wireless, which has offered LTE devices for longer. AT&T is ahead of schedule expanding its LTE network, with service in 26 U.S. cities, John Stankey, head of business solutions at the Dallas-based company, said last week.

Last month, T-Mobile USA Inc. announced it would offer the Lumia 710, Nokia’s first handset to run Windows Phone software in the U.S. The device, targeting first-time smartphone buyers, will cost $49.99 -- after a $50 rebate -- with a 24-month contract. It will be available Jan. 11.

Market Share

Google Inc. (GOOG)’s Android boosted its share of the smartphone operating-system market to more than 50 percent in the third quarter, according to Gartner Inc., more than double its share from a year earlier. Microsoft’s share dropped to 1.5 percent from 2.7 percent. Samsung Electronics Co. (005930) is the single biggest maker of smartphones. It surpassed Nokia to take that title in the third quarter.

Ballmer’s speech ends a run of 15 years’ worth of keynotes at the show by the executive or Gates. The Redmond, Washington- based company said in December that it was scaling back its presence because the timing doesn’t match up with its product- release schedule.

Microsoft rose 0.4 percent to $27.84 at the close in New York. AT&T climbed 0.3 percent to $29.76. Nokia advanced 5 percent to 4.25 euros in Helsinki.

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To contact the reporters on this story: Douglas Macmillan in New York at dmacmillan3@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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