Nokia Boosts Unlocked GSM Phone Sales

WHITE PLAINS, N.Y. — Nokia has begun to aggressively market its premium N series of GSM network cellular phones on an unlocked basis to online retailers, independent wireless specialists and national and regional CE retailers to supplement carrier-channel sales.

The effort is part of a "more aggressive across-the-board effort to bring in unlocked phones through alternate distribution channels," a spokesman said. The effort started in 2005 and includes fashion-oriented phones that, like the N series of "multimedia computers," supplement carriers' more volume-oriented offerings.

The strategy provides tech-oriented early adopters and fashion-oriented consumers with device options that they wouldn't likely get through carriers, although consumers must be willing to pay the $200-$300 premium for a phone that lacks a carrier subsidy.

"We want to support our carrier business but offer them [retailers and online retailers] more choices," said Rob Pignataro, Nokia's multimedia sales director for North America, said of the N series of multimedia computers. The strategy will help expand the industry, and "our channel partners also want to grow the industry," he said.

The N-series GSM and GSM/WCDMA handsets are sold through wireless distributors and traditional consumer electronics distributors to retailers who sell them without carrier subsidy to consumers. Consumers can activate the phone at the store or transfer an activated SIM card from their existing GSM phone.

Nokia offered its first N series phone on an unlocked basis in late 2005, when the phone became available to consumers through Ritz, CompUSA and independent wireless specialists, Pignataro said. About six months ago, however, Nokia got more aggressive in marketing unlocked N series phones. The reasons for the change included growing consumer awareness of the N series and the company's growing selection of N series models optimized for U.S. networks and consumers, Pignataro said. Early N series models were triband world phones designed mainly for the European market, so they operated in the U.S. in only one band, the 1,900MHz band, he explained. Newer N series quadband phones operate in both U.S. bands [850 and 1,900MHz], optimizing them for use on the 850/1,900MHz AT&T/Cingular network as well as on the 1,900MHz T-Mobile network. One new model, the N75, is a quad-band GSM/EDGE model that also operates in W-CDMA mode in the U.S. 850/1,900MHz bands.

Additionally, Nokia is expanding the N series' selection of clamshell phones, prefer over candy bar and slider styles. The company, however, also plans to expand the selection of all form factors within the N series.

With a greater selection of U.S.-optimized phones under Nokia's belt, the number of N series distribution points "is significantly greater than six months ago," Pignataro said. N series online retailers include Amazon, Let's Talk, BestBuy.com and Tiger Direct, and several weeks ago, Dell.com and Gateway.com began selling models.

In New York City's borough of Manhattan, 28 storefronts are carrying the N series, including Best Buy Mobile outlets, one CompUSA outlet, J&R Music World, Datavision and Willoughby's. The other stores are wireless specialty stores, according to Nokia's www.nseries.com site.

Pignataro declined to specify the number of outlets nationwide selling unlocked N series phones, but he did say regional retailers are carrying models on the West Coast. Nokia also plans a "broader rollout" to national and regional retailers that he expects to test N series phones, he said, noting that in the United States, "We're starting to see big-box retailers testing unlocked devices."

To support sales through storefronts, Nokia is mixing traditional newspaper and print ads with "nontraditional marketing to the targeted consumer segments," Pignataro said. That's supplemented by retailers' advertising, in-store merchandising and extra retail sales training, he said. Most of these efforts have been focused to date on the New York City market, described as a test bed for the company.

In-store merchandising efforts include the availability of live, activated phones at the point of sale to demonstrate features and benefits. In some cases, wired and wireless speakers are set up to demonstrate music capabilities, and laptops are on display to demonstrate laptop-to-phone synchronization.

Nokia also markets step-up phones in its fashion series through non-carrier channels and plans to offer the glass-and-stainless-steel Luna on an unlocked basis later this summer at about $800. Recent fashion phones have also been optimized for U.S. networks.

Although the selection of unlocked fashion phones in the United States has been shrinking, Nokia promises to expand the selection at an unannounced date beyond the planned Luna. Unlocked fashion phones currently consist of the stainless-steel 8801, which is largely sold out. The selection was previously larger with three to four SKUs in the Lamour series.

The first unlocked fashion phones became available in the United States in 2005.

Nokia also sells midrange phones on an unlocked basis, but only through its branded flagship stores, the spokesman noted.