Nokia has big U.S. plans, but no products

Nokia (NYSE:NOK) today stressed the importance of the North American market to its future business plans, but it delivered little in the way of new products targeted at this side of the Atlantic, even as what remains of its market share is eaten up by other vendors.

At its annual Nokia World event this week, the world’s largest phone-maker announced a trio of new devices using the new Symbian^3 operating system and revealed that 100 global operators will support its new flagship smartphone, the N8, at release. But none of those of that hundred will be a U.S. operator, and none of those of the newly announced devices will be designed for the North American market at launch.

While Nokia leads the industry in global handset sales and even dominates the worldwide smartphone market with its Symbian line, it’s always had trouble competing in the all-important North America region, where almost all phone sales are handled by the operator, cellular bands are out of synch with global frequencies and the greater part of the market is dominated by the CDMA standard. But as smartphones have taken off, Nokia's problems have compounded in North America, as it is ceding the high-end device market to the likes of Apple (NASDAQ:APPL), Research In Motion (NASDAQ:RIMM) and the several vendors that build devices on Google’s (NASDAQ:GOOG) Android platform.

At a media conference call after the first day of Nokia World, senior vice president and global head of sales Colin Giles said Nokia has recognizes its poor performance in the critical North American market, but unlike in times past, the vendor is taking active steps to rectify the situation. For a long time Nokia didn’t recognize the importance of operator collaboration in North America, choosing instead to make global devices it could sell throughout the world rather than tailor devices for a specific market and specific carrier, Giles said.

“Our stumbling block previously had been a lack of understanding in the U.S. market,” Giles said. But over the last 18 months, he added, Nokia has set up R&D operations in the U.S. with the aim of developing devices specifically for the North American market, targeting not only North American 2G and 3G bands, but also individual operators' device specifications, which tend to be more stringent than in other parts of the world. “What’s changed now is we know we need to listen,” Giles said. “We need to take those operator requirements seriously and include them very early in our development.”

Giles added that Nokia has to make itself more appealing to consumers as well as operators. He said Nokia is ramping up its design efforts to focus on North American consumer tastes and plans to overhaul its Ovi App Store — which has suffered from neglect in the U.S. — as well as produce more compelling applications for the U.S. subscribers for the Symbian platform.

Nokia, however, faces a chicken-or-the-egg problem. While it retails unlocked devices in the U.S. either directly through its Web site or Nokia stores or through resellers, those avenues are tiny compared to the operator retail channel. Without a major operator deal it can’t get its devices in front of the public in any meaningful way. Nokia also faces the problem of building phones almost exclusively on the GSM and UMTS-wideband CDMA market, neglecting the much larger CDMA market in the U.S. Nokia still has no plans to build any of its fancier smartphones for the CDMA operators until long-term evolution arrives on the scene, Giles said. At that point Nokia can partner with CDMA suppliers to build dual-mode 3G-4G devices, he said.

“If we’re going to re-enter the U.S. market, we’re going to do so as a challenger — that’s where we’re at right now,” Giles said. “If we’re realistic about it, we’ll focus on what we do well, and we do wideband-CDMA really well.”