Nokia’s N75 at AT&T: First step on American journey to establish brand value?

The word last week that Nokia Corp.’s new N75 device would debut soon at AT&T Mobility drew its share of attention, for good reason.
Though Olli-Pekka Kallasvuo, Nokia’s CEO, has made a point to extol the value of the U.S. market-declaring it a hotbed of innovation and pledging to spend one week each month here-the Finnish handset vendor’s first-quarter unit volume in North America hit 4.8 million, a more than 42% drop from the year-ago quarter.
Observers naturally focused on the N75-as with its predecessor, the recently launched N95, bound for alternative channels here-to discern if it presented any clues to Nokia’s emerging strategy for the U.S. market. There’s a bit of the Tarot-card reading astrologist in all of us.
With Nokia profiting worldwide in low-tier devices in emerging markets, where it rules, and innovating at the high-end of its portfolio with its N series “multimedia computing devices”-a family to which the N75 belongs-and having dropped CDMA research-and-development in favor of an outsourcing program without clear-cut partners in the U.S., such curiosity is understandable. Especially when turmoil at Nokia’s closest rival, Motorola Inc., suggests that the Finnish giant has a window of opportunity to reposition itself on Motorola’s home turf.
Of course, one has to avoid over-reaching in considering the bare facts.
The N75’s arrival at AT&T is “imminent,” according to Nokia spokeswoman Laurie Armstrong, though it had been set for a fourth-quarter release. Some insight into the device’s long gestation and the rapid turn of events since its original announcement may be reflected in the fact that it will be branded as a “Cingular” phone, AT&T Mobility’s predecessor and an entity now consigned to history.
(Kallasvuo, in an earnings call April 19, said the delay was due to “operator testing.”)
The clamshell device offers UMTS (3G) speeds, quad-band access for international travelers, multimedia entertainment, an HTML browser, 2 megapixel camera, Bluetooth connectivity and other features. It reportedly will sell for $200 with a two-year contract. And it arrives at AT&T just as a new consumer device (the “Curve”) from Research In Motion Ltd. and Apple Inc.’s iPhone (if delivered on time) hit that carrier’s shelves as well.
For those of you unfamiliar with the Tarot, fortunately Nokia has been fairly vocal about its renewed approach to the U.S.
Multimedia product spokesman Bill Plummer told RCR two weeks ago that with 3G networks coming online, Americans would warm to Nokia’s higher-end value propositions, embodied by the N95 and, presumably, the N75. In the N95’s case that would reach the market through Nokia’s baker’s dozen of “experience centers” and two flagship stores here-the alternative channels that vex carriers but guarantee GSM-only players such as Nokia and rival Sony Ericsson Mobile Communications a degree of control over their American destinies. In the N75’s case, the nation’s largest carrier will assist in familiarizing Americans with Nokia’s high-end efforts.
Kallasvuo himself pulled back the curtain on operator channels in the U.S.-and their challenges-during his company’s earnings call when he mentioned that Nokia has 1.3 billion customers in China, and four in the U.S. He was referring to the four, top-tier U.S. carriers, which largely control what products reach the market and at what price.
“We are investing heavily in upgrading our U.S. position by simply tailoring products to the U.S. operators,” Kallasvuo said, in remarks quoted by the transcription service, Seeking Alpha. “Here, AT&T definitely is the most important target. The much deeper cooperation with AT&T is ongoing and we will start seeing the impacts already this year.”
At CDMA vendors such as Verizon Wireless, Kallasvuo said, Nokia has had “very good cooperation, a very good discussion ongoing” about its outsourcing strategy, with results expected next year.
“Nokia is strategically targeting each of the four major U.S. operators with a separate plan of action for each,” said Ginny Lee, analyst with Technology Business Research Inc. “This multiple strategy has been the basis for their strong push for unlocked phones and Nokia-branded stores in the U.S., in order to bypass the operators.”
Another development worth tracking in Nokia’s self-proclaimed effort to capture more of the U.S. market: the company recently released a request-for-proposals from advertising firms to tackle its estimated $300 million annual spend. Armstrong said it was too early to say publicly whether the refreshed effort-a deal is expected by mid-year-would have a U.S. component.