Nokia N97 Goes on Sale in US without Carrier Subsidies

The much touted Nokia response to the iPhone, the N97, went on sale (pre-order) today in the US market -- without a carrier and the all important carrier subsidy. The phone, which costs more than $700, has received high marks, lots of horsepower (32GB) and functionality. But without a carrier subsidy it's pretty much DOA as a mainstream device.

I've argued in the past that no subsidized smartphone can consider pricing itself above $200 given:

  • iPhone: $199 with cheaper models rumored
  • Android/G1: $179
  • Palm Pre: $199 
  • BlackBerry Storm: $199 

While all these devices would cost much more if purchased without a contract and carrier subsidy, almost nobody will be doing that. Consequently, you're not going to see people buy the N97 when so many other strong choices exist -- and are much cheaper.

Rather than a super high-end phone as a way back into the US market, a better strategy for Nokia is to sell cheaper smartphones that offer good user experiences for less. It has toyed with this idea. Nokia could potentially own the lower end of the market and better compete that way.