Nokia Entering A Perfect Storm For Gains In The US Market

A small series of events in the mobile technology industry have produced ideal market conditions for Nokia in the US smartphone market.

While predictions of Nokia's doom and failure in the US market continue throughout the blogosphere, Nokia has stayed its course, and hedged its bets on only competing in the US market when the opportunity was optimal for sustainable growth.

This strategy looks to have been sound, as the perfect conditions for Nokia to act have finally arrived, and Nokia is making its move, entering into a perfect storm for increasing market share in the US.

SUBSIDIZED NOKIA N900 ON TMOBILEUSA

Randall Arnold, aka Texrat the Crypticum Keeper, a member of the Maemo Council, found this job post:

Product Marketing Manager T-Mobile (4 positions)-SCR0000000H: The objective of the Product Manager is to ensure key customer requirements and solutions are implemented in global products that shall be delivered to TMO-US and Rest of North America (RoNA). The Product manager shall be assigned to interface with the following sub units; Consumer smartphones, Business smartphones, Mobile phones or N Series - Computer phones

Then I happen across an interesting post on CTOEdge.com. Michael Hickins, former executive news editor for eWeek and former senior editor for Internet.com. In a pretty good discussion with Nokia's head of Maemo operations, Samir Agarwal, some interesting details were revealed. According to Hickins, "Agarwal said Nokia already has a carrier for the N900, but won't reveal which one until later in the month."

Now I'm no nuclear physicist, but I can read between the lines, so I'll step out and say it. The N900, with its unique AWS 1700/2100 MHz WCDMA frequencies supporting the TMobileUSA 3G network, will bless the TMobileUSA smartphone deck! It was an obvious match. There had been early doubt TMobileUSA would want it competing with its heavily marketed Android devices. Why an official announcement hasn't been made yet is beyond me, but pretty soon, Americans will be able to go get a truly high end Nokia device with a subsidy. Isn't life sweet?

SYMBIAN^4 A GO FOR AT&T

There's no secret that at&t is a member of the Symbian Foundation. at&t's position as the largest GSM carrier in the US gives Symbian a great partner for exposure to the US market. With carriers wielding so much control in the US, having the second largest carrier and largest WCDMA network behind you has enormous benefits. With at&t's possible iPhone exclusivity ending soon, they'll need a premium flagship smartphone solution to continue drawing new subscribers.

With a new hardware accelerated UI and official application development toolkit, Symbian^4 will be an excellent alternative for at&t. New always arrives with buzz, and the lessons learned from the iPhone could be used to bring Symbian's power and in depth features enjoyed and preferred by the rest of the global markets to mainstream success in the US for the first time.

Plans to implement the Ovi Store into the at&t application deck is a great first step to putting Symbian on the American map. It is easy to have competing carriers crying, "Me, too" when at&t starts to make noise about something. No one wants to miss out on another iPhone opportunity, and all carriers are starting to diversify their smartphone portfolios to include more choices for consumers. Finally good news for Nokia in the US.

IPHONE TO RISE IN PRICE?

Apple's iPhone has risen to quick success for various reasons, but the main one, in my opinion, is the dirt cheap subsidized price. By getting a whopping $450 subsidy from at&t, the iPhone could be had more easily than most smartphones. The iPhone is positioned as a high end smartphone, a segment which usually went for around $350 subsidized in the US until the Cupertino creation entered the market. $199 is almost like buying a BMW at a Honda price. It allowed users to get a high end device at a midrange price.

Wall Street analyst Brian Marshall of Broadpoint AmTech believes the iPhone's "sweetheart deal" with at&t will end without exclusivity. Once at&t's exclusivity ends, expect a substantial price increase at all carriers where it is offered. It won't be motivated to offer such a high subsidy without exclusivity, and other carriers will most likely offer a more typical subsidy in line with other similarly priced devices. A $300 subsidy would be in line with what other similarly priced devices will get from carriers. With the iPhone rising from $199 with a contract subsidy to $350, price will become more of a focus for smartphone consumers, and the playing field will be more even for all competitors, including Nokia, which should appreciate that even more with a subsidy of its own. So far, Nokia's majority of its US sales have come from the full retail unlocked market.

DROID AND WINDOWS PHONE TO CHALLENGE IPHONE

Apple's growth has gone along mostly unfettered since its inception. While the rest of the world was enjoying the phenomenal Nokia N95, the iPhone was the only high end consumer smartphone available. One of the best things that could happen to Nokia is if another true iPhone competitor arises to expose the limitations of Apple's smartphone ecosystem and device. This looks to finally be happening with the Motorola Droid on the Verizon network.

Verizon has embarked on a marketing campaign that promotes the Droid as the anti iPhone. It's iDon't and Stealth invasion TV ads have already created massive buzz. Verizon is positioning the Android OS as an upgraded alternative to the iPhone, and Apple is now scrambling to retain its perch at the top.

This is just the environment Nokia needs, an opening to fill a space the market is starting to finally recognize. More complete feature sets and more open and customizable devices will be desired in the US, and Nokia's smart device OSes fit the bill perfectly, especially in comparison to Android, believe it or not. I'm sure all carriers are aware, and I expect Nokia smartphones and portable desktop devices to meet growing demand.

THE PERFECT STORM OF OPTIMAL CONDITIONS FOR GROWTH

With the current king of the US smartphone hill facing stiff competition of on various fronts, while also suffering a higher cost of initial ownership, the iPhone era in the US may finally be coming to an end. Carriers will be looking to differentiate and offer a wider array of choices to attract consumers. Verizon's massive subscriber numbers and head to head marketing strategy against at&t and the iPhone make a potent threat, and could spread the market share more evenly for those looking for something that isn't another iPhone or Blackberry.

Nokia's improved relations with the GSM carriers have come at just the right time. Its looking more and more possible that more people will finally be able to get high end Nokia smartphones and portable desktop devices at a reasonable subsidized price. That may be the biggest obstacle they've had to overcome in the US. The war is just heating up, and chaos has begun to ensue. Amidst the melee, Nokia will be getting in shots of its own, and at just the right time. We'll see just how effective those shots turn out to be over the next five quarters.

Nokia has wisely chosen to defy the carriers' desire to cripple and close up their devices, and it is beginning to pay off. What was frowned upon before is now favored by consumers. Looks like Nokia's time has finally come. We'll be watching to see whether they take advantage, or miss the boat altogether. The window has opened...

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