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Why Nokia Cancelled AT&T Smartphone Launch

Nokia (NOK) decided to cancel plans to bring the X7 smartphone to America. It would have been the first real follow-up to the much-hyped N8, but lack of support from intended carrier AT&T (T) and the dated platform made it unreasonable for Nokia.

To recap, last year's N8 was, in many critics' eyes, powerful enough to make Nokia get noticed again: 12 MegaPixel camera; 16 GB internal memory; and a dedicated graphics processor. Unfortunately, the high price from the lack of carrier support and the lackluster user interface stifled the phone -- and the equally powerful X7 looks like it is on the same path.

Too expensive without AT&T subsidies
According to the Wall Street Journal, the Nokia X7 was originally meant to be an AT&T exclusive phone. Something happened along the way, however, and AT&T lost interest in the device. The company now doesn't want to pony up for the marketing push Nokia thinks the X7 needs for a proper launch.

More important, AT&T isn't giving the subsidy dollars needed to make the phone affordable. Without these precious subsidies, the X7 would likely run $500 or more. Compare this to the upcoming Verizon (V) iPhone which, like AT&T, the carrier will subsidize to the tune of roughly $350 per phone.

AT&T sights set on iPhone, Atrix, others
AT&T doesn't have many reasons to subsidize Nokia's next major smartphone:

The Nokia N8, um, sucked
The biggest issue, however, is the performance of the Nokia N8. Initially praised here on BNET and other outlets, the N8 was a dud when it was finally released last fall. Problems included a power glitch that caused the phones to randomly turn themselves off and a dated Symbian operating system that paled next to Apple's iOS and Google's (GOOG) Android.

As the Nokia Blog put it in its review of the Nokia N8:

It runs the best version of Symbian yet, but the OS falls short to Android and iPhone with core apps such as the web browser and messaging.

Unfortunately, the X7 uses the same system that has been called "cumbersome and outdated" relative to competitors. The X7 is still being released overseas, but, in the shadow of the new iPhones and other devices, it's better that it didn't come to America. Once a market leader, Nokia should be reevaluating its operating system and determine what would make its phones desirable based on the standards set by Apple and Google.
Photo courtesy of Bob B. Brown // CC 2.0