If you’ve been reading the tea leaves for signs of Nokia Corp.’s resurgence in the United States, a more tangible sign could be sitting on the shelves at you local AT&T Mobility store.
The Nokia 6555, a mid-tier clamshell priced at $50 with a mail-in rebate and two-year contract, is the fruit of the Finnish company’s San Diego-based design efforts aimed at consumers upgrading their handsets while delivering AT&T Mobility’s revenue-generating services.
The strategy is building Nokia’s brand awareness and customer base here as well as pumping up AT&T Mobility’s average revenue per user, according to Nokia’s manager for the AT&T Mobility account.
(AT&T Mobility could not provide a spokesperson to address the 6555’s place in its portfolio and significance to its strategy by press time.)
“The San Diego site is fairly unique in the Nokia world,” said Ian Laing, VP and general manager for Nokia’s AT&T Mobility account team. “We decided that to win in North America, we have to dedicate resources and focus on the needs of the carriers. So the San Diego facility focuses on North America specific ally and AT&T specifically. We’ve shifted focus in San Diego to North America, to AT&T and to 3G. W-CDMA is AT&T’s growth engine.”
Flying phones
How closely is Laing working with AT&T Mobility? He jokes that if he wants to introduce a new handset, he can throw it out his window with good odds it’ll land in an AT&T Mobility office. His office is in the same complex in Atlanta as AT&T Mobility’s headquarters.
“We’ve learned how to collaborate with our carrier partners early in the design cycle,” Laing said.
In the case of the 6555, AT&T Mobility suggested, for instance, that Nokia swap the positions of the volume and push-to-talk keys. The vendor did so. It also added the now-requisite “dedicated buttons” that directly access revenue-generating services. A “CV” key accesses “Cellular Video” (it previously designated “Cingular Video”) and a PTT button accesses AT&T Mobility’s Kodiak-based PTT service.
Laing also noted that the 6555’s design-a slim clamshell that doesn’t make a fetish out of extreme thinness-features a “smooth-back” design that, when open, offers a hinge that doesn’t catch on the hand. Apart from the 6555’s specific offerings, the handset represents Nokia’s overall strategy of establishing its brand proposition as American consumers upgrade their handsets-presumably entry-level Nokia handsets, Laing said.
“To drive consumers to AT&T, we need to provide a range of products in all price tiers, especially handsets that require more modest subsidies and improve the carrier’s ARPU,” Laing said. “We’re now fleshing out the Nokia portfolio for North America. Mid-tier offerings are critical to catch consumers who’ve owned entry-level Nokia handsets. The 6555 shows the American consumer that Nokia offers sleek, clamshell designs and that changes the way American consumers view the Nokia brand.”
According to analyst Miro Kazakoff at Compete, Inc., which tracks consumer interest by measuring online research and purchasing patterns, Nokia’s recent efforts are making the needle move.
Hitting its target
Compete has in the past seen consumer research into Nokia products lag behind the handset maker’s share of products in carriers’ portfolios, Kazakoff said.
“We haven’t seen American consumers research Nokia products in depth,” Kazakoff said. “In the U.S., Nokia has been known for its well-designed, low-priced candy bar and clamshell phones. These devices may sell solidly, but they don’t draw consumers to stores to check out the newest Nokia product.
That’s starting to change, the analyst said. And there’s the payoff as well.
“Nokia seems to be beginning to build some interest and finally capture a bit of the ‘cool factor’ they have elsewhere in the world,” the Compete analyst said. “Consumers who do research Nokia products are likely to purchase them-Nokia has a great ‘conversion rate.'”
Now that the U.S. market, in general, is entering an upgrade cycle, a mid-tier, modestly priced 3G clamshell is positioned for traction in the market.
“Build on what you have in the market,” Kazakoff said. “And bring consumers up incrementally in the value chain. That’s a low-risk strategy and likely to succeed. The downside is, that may move the needle a little bit, but it doesn’t allow you to leapfrog your competition.”
“The key is that the 6555 has a U.S.-friendly form factor while supporting AT&T’s service initiatives,” said Avi Greengart, analyst at Current Analysis.
“There’s competition from Samsung [Electronics Co. Ltd.] and LG [Electronics Co.Ltd.] that provide the same functionality at the same price, so this is a solid base hit, not a home run, for Nokia.”
“Nokia hasn’t fielded a competitive product like this in the U.S. in a while, so it’s a significant step in the right direction,” Greengart concluded.
