Nokia Bails Out On U.S. Flagship Retail Stores

Nokia did not respond immediately to a request for comment by Channelweb.com. In a statement, the company explained:

"The Flagship stores were originally conceived to inspire and educate consumers to the benefits of mobility through an innovative retail experience, and to broaden the appeal of the Nokia brand. Since opening the stores in New York and Chicago (2006), consumer awareness in the U.S. has grown substantially. Weighing those dynamics with Nokia's clear strategy in North America, and our well-established retail channel with third parties, we will close these two stores (New York and Chicago) in early 2010."

In addition, Nokia will close one of its two London stories and relocate its Sao Paulo store. Nokia's first retail location opened in 2005 in Moscow.

Nokia has the top market share in the world for handsets -- about 37 percent -- but has been challenged to break into the North American market, especially the U.S., where by most accounts it has a single digit share and its popularity is eclipsed by Apple's iPhone, Research In Motion's BlackBerry and other models.

Nokia has suffered substantial financial losses this year, and U.S. consumers are also still waiting on the stateside launch of the Ovi Store, Nokia's much-touted alternative to Apple's App Store and other mobile app communities.

Most recently, Nokia offered pundits a look at its mobile strategy for 2010, with CEO Olli-Pekka Kallavuo saying that Nokia would still be launching phones on its Symbian mobile OS and reserving its new Maemo OS for high-end N-series devices. Kallavuo sought to put to rest rumors that Nokia would do away with its Symbian platform following hints from executives at a marketing event earlier this year.

Said Kallasvuo at Nokia's Capital Markets Day this month, "As an operating system, Symbian has reach and flexibility like no other platform, and we have measures in place to push smartphones down to new price points globally, while growing margins. I see great opportunity for Nokia to capture new growth in our industry, by creating what we expect to be the world's biggest platform for services on the mobile."

The retail market for phone manufacturers, carriers and those with a stake in cloud computing services continues to see a number of strategies come to the fore. Apple, for example, has found success with its retail locations -- something Nokia was hoping to emulate -- and Microsoft took the brick-and-mortar retail plunge, too, opening its first location this fall in Scottsdale, Ariz.