Even Under Microsoft, Nokia Still Shuns the U.S. Market

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Credit: Karlis Dambrans

Why does Nokia always launch phones overseas first?

Today, Microsoft introduced three new Nokia Lumia phones. They look nice -- thin, with a nice silver edge and the nice cameras that Nokia is known for. Too bad that, as usual, these aren't available at first in the U.S.

For years, I've been mystified with Nokia's U.S. strategy. I thought it finally might change now that Nokia is owned by Microsoft. But it seems like it hasn't. At least, not yet.

Nokia once dominated the U.S. market back when everyone had that candy bar model that came with the AT&T plan that first democratized cell phone minutes. But the company failed to adapt to the flip phone trend and then the evolution to smart phones. Now, Nokia has just a sliver of market share in the U.S.

For many years, Nokia acknowledged that it was failing in the U.S. market and that it needed the U.S. market, where trends are set. It opened research facilities in the U.S., built flagship stores in New York and Chicago, and hired U.S. executives. Nothing has worked.

One thing that definitely hasn't helped Nokia win over the U.S. market is launching phones elsewhere first, like it did today. By the time the phones hit the shelves here, people have forgotten about them and they feel like yesterday's model.

So why does Nokia continue to make the U.S. market wait for phones? For many years the common thinking was that Nokia had a strained relationship with U.S. operators. U.S. operators dictate the market more so than their counterparts in other countries, partly because of the subsidy model here -- if an operator doesn't subsidize and promote your phone, you have little chance of success. Industry observers said that Nokia had a difficult time adapting to the environment in the U.S., leading to a situation where the operators weren't keen to sell or promote its phones.

If that's still true, it's a bit shocking that Nokia hasn't been able to rectify the situation after all these years. It can't be all that hard to learn the ropes and adapt.

It could be instead that operators just don't like the phones and so opt not to promote them. That seems like a stretch to me because some of the phones are pretty nice and sell better in other markets.

Or, despite what Nokia has been saying for years, maybe it has decided that the U.S. market isn't worth the work. If it can focus on other regions where it has more of a toehold, it can blossom from there.

I'm not sure which of the reasons is to blame. But it's possible that the situation might finally change. Microsoft's acquisition of Nokia only closed in April. That means the phones introduced today were surely in development before then, leaving Microsoft without much time to try to influence the launch strategy. I'll be very curious to see if the U.S. finally gets at least equal footing with the rest of the world once Microsoft has control of the process from start to finish. 

This story, "Even Under Microsoft, Nokia Still Shuns the U.S. Market" was originally published by CITEworld .

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