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February 12, 2007

Are US Consumers Not Smart Enough For A Smartphone?

by Darla Mack

Ricky, Olly and myself (as well as many other US consumers) share the same problem here in the US.  We've been members of Howard Forums for some time now, and it seems that all of us Nokia Fans want an answer to one question... what is up with the US market?  Prepare yourself folks, this is going to be a rant.

I guess this could be a follow up to the N75 post, but I've recently been using the expression, "right phone, wrong continent".   Its hard to fathom how Nokia is so popular here, when the devices that some of us chose to use aren't even linked to a US provider.   The advantage that we have over other regions, and yes I've said this before, is our data plans.  Unlimited data is very popular, if not standard on the GSM services here.  Can't really speak for Suncom since I've never used them.

I refuse to believe that its the consumer market that have been brainwashed into thinking that the Motorola RAZR is the %@#%!  Cingular store reps tend to push whats hot (commission wise) and I'm not saying all areas.  But I've been doing secret shopping in my area and thats what I've noticed. 

Last year Cingular changed their contract options from 1 year to 2.  If we must lock ourselves into a 2 year contract then we need more device options.  More options that we as consumers know about!!  I hate to say this, but myself as well as other "editors" here in the US would love to get some feedback from Olli-Pekka Kallasvuo on this issue, just so that we can get an understanding.

Sure, its easy to say, just use the device that you are using and forget the providers... but thats not the right answer.  There MUST be a solution of some kind.  And dare I mention the warranty issue again, which does play an important factor.

Another thing that is odd... why offer these devices in retail?  Customers can walk into the Nokia Flagship Stores in NYC and Chicago and purchase any GSM phone that they chose, without a contract.  So what does that tell the providers?  That we really don't need you... until it comes to support.  Obviously, we have many US consumers that are in the know of S60, Multimedia Computers and such, if not, would there have been a need to open a Flagship store?

I'm hoping that sometime in the near future an answer, or a resolution to this concern comes through. 

What are your thoughts?


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Hey Darla, got my own rant up in the comments of Ricky's post -- couldn't agree more on this one!




When it comes to the distribution to North American markets, the providers decide what features and solutions can or can not be enabled. As you know, Nokia is revolutionizing the industry with the new NSeries multimedia computers however due to many restrictions in markets such as the United States, Nokia are unable to activate features that are common in many of the companies multimedia computers. In markets, such as Europe, the providers may customize software to a degree but the key features and solutions remain (Wifi for web surfing for example). With Qualcomm holding back inovative solutions (and the essential move to widely adopt the GSM protocol), the market in the United States makes it hard to distribute limited device/features for outdated provider controlled networks. Therefore, although Nokia delivers rich and advanced products, unforetunately, due to this problem, the devices are not very presentable to markets like the United States except for through retail outlets like New York.

Ricky Cadden

@ Anonymous - I have 2 responses:

1. Nokia has been catering to the carriers in the US for years. Lately, though, they haven't exactly presented the carriers with viable options. The first 2 3G phones presented to Cingular, the 6282 and N80, were indeed 3G, but only with the 1900 band, when it was clear that Cingular required both 850/1900. And if Nokia knows that the US carriers don't want wifi or other features, how difficult is it truly to make a device specifically without these features?

2. Given the difficulty in getting devices through the "red tape" of the US carriers, why is Nokia's retail attempt so half-hearted? Sure they have 2 Flagship stores, and those are impressive. But what about the seemingly failed partnership with CompUSA? I don't see that being fully utilized. And the Nokia Experience Centers? I've been to 2 of them, and it would not require much modification to add a cash drawer to the computer already in place, and add some lockable cabinets.

Also, the handsets on display in those Experience Centers are very outdated, including phones such as the 6170 and 3100, along with devices like the 9500 that don't even have all the necessary bands for use in the US. Why show off a product that your audience can't buy? Why not fill these Experience Centers with devices that US consumers are able to purchase and fully use?


@ Annoymous,

While your response does have validity and is much appreciated and well explained, I do have a few things to add. Why is customization necessary? Is this part of the issue? Me personally, I've never seen nor had the need for the provider customizations. Besides the fact that Cingular cripples most java capabilities in Nokia devices even the ones that they carry. Provider customization isn't needed in order for the device to work, and I don't really think consumers will miss it all that much.

I honestly don't thing that its fair that the providers decide what features and solutions we can or cannot use. Since we pay for service only. We shouldn't have to pay for unecessary stuff that takes away from devices, such as customization. But look at the number of consumers that are already using devices such as the N73, N80ie, N93, N95 (yes) and others. We've been doing it for years on these same providers, without many problems.

Antoine of MMM/Brighthand

Hey Darla;
Great post and to some extent I do agree with the title of your post (hoping now that this does not turn into a long comment).

The mainstream US-American computer user seeing computing as an accessory and a luxury, moreso than a means to connectivity and productivity (this is discernible from the consumer focus to bigger and feature-laden products rather than those that meet a need). And while most will agree that they want a device to fulfill a specific need, the fact is that low prices and fashionability always speaks louder.

The other very poinent issue is that computing on mobile devices has not yet met a common usable ground where one can expect things to just work without tweaking or knowing how to "flash their phone for an update." These things while easy, are frightening to many users. I think that this will change as the younger generation of US American users are used to using and tweaking mobile devices, but that is still a few device generations away.

Cost is another issue. Data plans offer no (easily) discernible cost benefit when someone is paying $40 a month for a cable fed 7MB pipe at home. Sure, mobility is some justification, but the market has played up the "big brother" field just enough that connectivity sounds more like compromise than convenience. When pricing and ability align with user perceptions of use, things will (quickly) change.

I, like yourself and many who visit here and other sites, love the idea of data unattached devices. We will willingly purchase unlocked phones, and move to service plans that work best for our abilities and budgets. But this is not the want nor case for a lot of folks. Phones such as the iPhone will expose this aspect of mobile use and help. But until the carriers open up and marketers speak a lot louder, technology evangelists (http://blog.guykawasaki.com/2007/01/technology_evan.html) such as ourselves need to speak and educate on what mobiles can and will do, and be willing to take a chance on changing one of the few nations that changes in spurts not in gradual shifts (in terms of technology adoption).

Lastly, its in my opinion that changing just a set of users in the US American tech culture would be enough to be a mouthpiece to the majority. I took pastors/evangelists as my speaking point. Others take real estate agents, doctors, lawyers, teachers, or college students as their pointers to change the perception of mobile use in the US. But it won't happen overnight. It is happening slowly though. Slow is always better than no.

Great topic Darla. Keep up the good work here.


not everyone bows to america's whim.

europe gets shafted alot but when we complain we get the "we are america, biggest market, better than you" crap.

so frankly, i dont care about america not getting alot of europe's cool handsets. there are many available, your networks just have to bend to our will.

Thats my rant over.

All that said, i hope things improve for you guys. I'm sure right now Nokia and similar are working out something with the US carriers. Just a matter of time. ^_^


@anonymous: It's simply asinine to point to customization as the reason that U.S. providers are shafted on Nokia's smartphones... when was the last time you looked at the firmware of a Voda branded handset? Or an Orange branded handset? They are *completely* customized, yet still make it to market in a reasonable amount of time. It's not customizations that are slowing down the adoption of S60 by U.S. operators -- it's the fact that Nokia isn't offering anything that they can *use* let alone would *want*.

Yes, Operators are to blame in delays sometimes, but we are talking about an out-and-out lack of manufacturing U.S. oriented phones by Nokia.

You can't say that the n93 was delayed because of customization -- because Nokia never even attempted it in the U.S.! Same for the n73, 3250, 6630, on and on and on.

Blame whomever you want, but if Nokia doesn't start acknowledging the U.S. market with something more powerful than a basic Series 40 phone, they are HANDING the U.S. Smartphone market (and in the end the DATA market) to Microsoft based phones from HTC, Moto, etc.



I'm almost afraid to mention that the E61i is on the "Expected Soon" section of NokiaUSA's website.


Somethings I would like to answer.

I can understand the frustration and excitement that many NSeries and Nokia multimedia computers bring.

United States providers have the final say in what products they choose to sell and promote. Nokia is a manufactorer of mobile multimedia computers and not a distributor, hence it is not Nokia that has the final push to say what providers like T-Mobile and ATT will carry. But below are some things that may help clarify Nokia and other manufactorers push into the North American market.

One big hurdle has been that while the market in the United States has adapted to emerging technologies such as GSM and 3G technoogies, Europe and Asia have surpassed the United States previous dominance in telecommunications and electronic commerce. This lead on 3G and current generation wireless web access has given European and Asia manufacturers a significant advantage in shaping the communications technologies of tomorrow, and consequently, is shaping the nature of electronic commerce and Internet content.

However, the biggest problem mobile manufactorers have is the fact that United States operators are choosing different 3G and GSM technologies which only compound the current problems manufactorers such as Nokia face with insufficient inter-operability. The different mobile telephony standards in the United States reduces potential demand for the new services and products that Nokia introduces such as their multimedia computer N95.

Until harmonization of technology is adapted by the United States and the coverage is sufficient enough for the providers to take advantage of products without limiting them, mobile technology like Nokia's multimedia computers, will in Europe and Asia have much more market penetration.

Jon Donsson

I think this should be asked from US operators. Products are offered to them and they say what they want, and use sometimes quite lame excusess when not approving some product in their lists


Its always been favoritism, Qualcomm and Motorola they control the market for sure, and both have their lobbies that make sure European companies have a minimal share of the market, just remember how long and why it took so long for the US market to adopt the GSM technology, also why they opted for the 850MHz.
Marketing is a very big reason too, people wants a free phone, they like to be locked in a contract, maybe not by choice, but if that's whats available, then be it, and for that cheap phones are offered, and if its not a cheap phone, the carrier will make sure its useless elsewhere, like the Nokia 8801 for example.
All I have to say, it is good that Apple went GSM, maybe this will help people understand the need to have choice, and voice their opinion, specially that their iphone will be locked to one provider.
Maybe you should treat your provider the same way you treat your Cable TV provider when you request to add a channel when a new TV station is out. Try the same approach with new mobiles :P



Thank you so much for your clarification. I think we in the states have been in the know about the provider issue, but just needed further clarfication on it. It still doesn't make sense to me that the providers have so much control. I'm assuming that these were the reasons that Nokia has had "rumored" bad relationships with certain providers such as Cingular in the past.

While I don't blame Nokia, I just wanted to voice my opinion on the topic. Now I have to dig and search to see if I can get someone on the upper level of Cingular and T-Mobile to shed some light on the situation.


Nokia use to be the main supplier of phones to carriers back in the early 90s, remember the 8390 and how everyone carried one?

But recall that is when the phone was being sold with plans for around $50 or even free that it really took off. It's the same with the Razr.

It looks like Nokia is just looking at the high end where they make the highest margin. And it's that margin that analysts look at after each quarter. Motorola got bit in the bum last quarter cuz they made so little from each phone.

But of course all this contradicts Nokia's and Motorola's plan to cell cheap phones to emerging markets. Don't they just lower their margins?

If it's not margins then what could be the reason Nokia doesn't sell well in NA? Likely answer, the carriers. Maybe Nokia doesn't like playing with them. Even Apple didn't want to play with Verizon.


You forgot one thing.
Even if you have your own device, if you decide to switch carriers, you are STILL locked into a one year contract - minimum - In europe you pay your $15 SIM fee (heck they give you the SIM free in some places) and off you go - month to month - no contracts.

Ms. Jen

Hi, My Name is Ms. Jen, I live in California.

I bought a car from Toyota, but I get my gas at various stations as I need it.

I bought my unlocked N80 online, and I slip in sim chips as they are needed, where they are needed.

I moblog. I have a lot of friends with good jobs in their 30s and 40s who watch me use my phone, read / view my website, and then ask me to help them buy a Nokia smartphone and set them up. Then things fall apart...

If they are on Verizon or Sprint, they are screwed. No sim chips and the curse of LG and Motorola UIs. They stay with crappy Motorola phones and struggle with terrible user interfaces. And get VERY frustrated when they see how sweet the Nokia UI is.

If they are on Cingular or T-Mobile, then purchasing a Nokia online works, slip your sim chip in and off you go. Well, until it is time to get that data plan. If you are a new customer, one can get a great unlimited data plan for under $30, but if you are an existing customer, then the unlimited data plans are over $70 (?!?!?!??!).

Add insult to injury, Cingular's network has gone down in quality in the last year. I have more call drops, less strong data connections or no data than a year plus ago.

[rant, rant, rant, rant, rant, rant...]

[...takes a deep breath...]

Nokia, fight the good fight. Do not concede the field to bad UI and yucky clamshells with 1 megapixel cameras. Get your boxing gloves on and duke it out.

Make Steve Jobs jealous. Make the US provider/carriers eager to do business with you...

smiles, jen ;o)


Please see my blog about Smartphone OS market share (https://blogs.forum.nokia.com/view_entry.html?id=416) where I also mention your article.


Joel West

The US and Europe are very different markets. The US has always had more operator competition than Europe (other than the UK TACS days), and has been addicted for 20+ years to handset subsidies as a way to attract new subscribers. Smartphones in the US started with pen-based devices vs. the Nokia Communicator (and later Psion-type) minikeyboard devices. Americans use their phones in cars where Japanese use them in commuter trains and Europeans in cafes.

In the US, people use Palm, Windows and now Blackberry smartphones and (with one exception) no carrier offers a Symbian phone. For a Nokia fan, at least they have significant share here, unlike Japan, where they have been a non-player.

Complaining about how the distribution channels, market structure, or local demand are different in the U.S. (vs. Finland) is as productive as complaining that winter nights in Miami are not as cold or long as in Helsinki.


Interesting view from a Nokia US employee here: http://www.phoneboy.com/node/1351


Thank you Cooli... that is interesting news.


You're welcome Darla :-)
Seems a meme is emerging on the topic:
Still no answer from OPK or Tommy?

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