Nokia N97 Smartphone Unlikely to Reach North American Market

There's no disputing Nokia's dominance in the cellphone market. With sales of $70 billion, it holds 40% of the market globally. Interbrand ranked it the world's fifth-most-valuable brand, behind the likes of Coca-Cola and IBM. In parts of rural India, Nokia (NOK) is to "phone" what Kleenex is to "tissue": a synonym.

But in North America, despite a marketing blitz that includes two new American concept stores, a series of popular Nokia music venues, and a flashy billboard campaign peppering New York City's subways, Nokia's market share has slid to just 8% from 15% two years ago, according to research outfit IDC.

That is a huge problem for Nokia because North America is quickly becoming the world's fastest-growing market for so-called smartphones, those high-end devices that surf the web. Any cellphone company that hopes for world domination must lead the smartphone market too.

At AT&T's behest, Nokia produced the phone in several different colors and changed the positions of some of the buttons. In December, Nokia launched its third Verizon (VZ, Fortune 500) phone, an elegant midrange gadget that Verizon named Mirage. T-Mobile sells eight different Nokia handsets. None of them are smartphones.

The problem is not the product. The n97 might not be ready for sale, but Nokia's e71, which looks like a sleeker version of the BlackBerry Curve, has won design awards and dominates many European markets. And it has several phones in its n-series of multimedia devices that boast the best cameras and videocams in the biz. North American president Mark Louison says U.S. carriers will soon support the phones. But ask the phone companies, and they say they have no plans to roll out Nokia smartphones anytime soon.