Optical/IP Networks

Nokia Tries to Unlock US Market

Nokia Corp. (NYSE: NOK) has started recently hinted-at moves to build more distribution channels for its high-end and business phones in the U.S. outside of the traditional cellular operators.

The world's No. 1 cellphone vendor has now started selling some of its E and N series phones via Ingram Micro Inc. (NYSE: IM) and Brightpoint Inc. for large-scale enterprise buyers, and Dell Technologies (Nasdaq: DELL) and Gateway Inc. for individual users. The move to unlocked phones that can be used with multiple (GSM) operators breaks the traditional sales model in the U.S., where the carrier reigns supreme and it is hard to buy devices that aren't tethered to a specific network.

Nokia, however, as Unstrung reported recently, had to make some fresh moves in the U.S. because of poor results earlier this year. Nokia had seen enterprise net sales in the first quarter of this year leap in almost every region except the U.S. The firm also reported North American device shipments down by 42.5 percent at 4.8 million in the first quarter of the year compared to the same period in 2006. (See Nokia's US Enterprise Headache.)

Dell is selling the Nokia E61i enterprise smartphone, which incorporates 3G and WiFi connectivity, for $423.77. It also has other E and N multimedia phones on its site. Users will require a SIM card for either the AT&T Inc. (NYSE: T) or T-Mobile US Inc. networks to get the phones up and running.

Most analysts believe that Nokia needs to do more to get its products in front of American consumers and enterprise users. Many, however, are skeptical about the vendor's ability to break the carriers' stranglehold on the market.

"In the United States it is essentially a sign of desperation if a phone vendor tries to go around the carriers," former Gartner Inc. analyst Todd Kort told us recently. "The carriers are very powerful, and I cannot recall a single cellular device that achieved much success without carrier support. That could change, but even Apple figured it had better work though Cingular [ATT]."

— Dan Jones, Site Editor, Unstrung

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