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AT&T's Latest Coup: Nokia E71x

Nokia E71x
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Nokia may be betting on more than the popularity of texting by having AT&T be the first U.S. carrier to subsidize one of its smartphones -- the Nokia E71x, available today for $99 with the standard commitment of a two-year contract.

The move by the world's largest mobile phone maker could signal that Nokia is ready to make a serious claim in the U.S. smartphone market -- which could be an antidote to bleak first-quarter financial results. Prior to today's news, Nokia smartphones were on sale in the States, but were offered directly to consumers without going through a carrier partner -- which meant steeper prices, often around $400.

Without the marketing and subsidy of a network provider, Nokia's smartphones lagged the competition in the marketplace -- namely Apple's iPhone and Research in Motion's BlackBerry models. And with every major handset maker set to release signature models this summer, the competition is only going to become more intense.

Now, Nokia may now be trying to change all that. The new E71x is super slim -- measuring a mere 0.39 inches, according to the company -- while offering a QWERTY keyboard and broad multimedia and Web browsing support.

Other highlights of the new Symbian S60 3.2-based phone include a 2.4-inch, 320x240-pixel display, a 3.2-megapixel camera, assisted GPS, EDGE and 3G data capabilities. The phone can also tap into Wi-Fi networks, and also integrates with corporate e-mail systems from IBM and Microsoft, Nokia said.

The E71x can also handle media -- including MP3, Windows Mobile and Apple iTunes-friendly AAC audio, along with H.263 and MPEG-4 video -- and comes with a full HTML Web browser. Unlike the iPhone, the E71x also supports Adobe Flash Lite, so it can handle some Web-based Flash content.

The E71x also plays XM Radio and supports AT&T's branded navigation service.

The unit comes with 120 MB of onboard memory and a microSD expansion slot, USB 2.0 connectivity, and Bluetooth 2.0, according to the company.

The debut of the E71x also marks something of a victory for AT&T, though the No. 2. U.S. carrier is still sitting pretty in the smartphone space with the exclusive contract for the iPhone, which helped to further pad its bottom line in recent quarters.

Yet the iPhone is still significantly pricier than the E71x, even after a contract -- making the latest addition a way to capture potential smartphone customers who aren't willing to pay a couple hundred dollars more for an iPhone.

Focus on keyboard

For its part, Nokia and AT&T are focusing a good deal of their marketing messaging around the E71x's keyboard design.

That's a result of a survey of 500 Americans commissioned by Nokia that placed a higher premium on typing-based communications than voice. According to Nokia, 52 percent of survey respondents said they would prefer to use texting or e-mailing if they were limited to a single communication method for two weeks.

The option of only making voice calls for two weeks trailed behind at 40 percent, according to the survey.

"The trend for messaging, whether e-mail, IM, texting or social networking, is stronger than ever -- we are seeing a real shift in the way people prefer to communicate," David Petts, a vice president and general manager at Nokia, said in a statement. "The E71x is one of the most stylish and sophisticated QWERTY smartphones on the market, and it's the ideal companion for people who enjoy easy messaging and connecting with their friends. We are thrilled to now bring this sleek smartphone to people across the United States with AT&T."

The launch of the E71x comes as the summer shapes up to be quite a showdown in the smartphone sector. So far, RIM (NASDAQ: RIMM) is expected to have at least one new BlackBerry model on the market by summer, dubbed the Niagara, with a second version of its touchscreen Storm due sometime this year.

Palm is set to have its Pre smartphone available in the first half of the year, while industry watchers speculate that Apple's new iPhones could come as early as the company's developer conference in June.

Finally, as smartphone makers battle it out in terms of which devices will prove most popular with consumers, there's also a fight for supremacy on the mobile operating system front. All eyes are on Samsung, Motorola and HTC, as all three have announced handsets coming this year based on Android, the Google-backed open-source mobile platform.

Android is being closely watched as a rival to Microsoft's (NASDAQ: MSFT) Windows Mobile, the Apple (NASDAQ: AAPL) iPhone and Research in Motion's BlackBerry OS. Android's open source model means it's relatively inexpensive for handset makers to build into their designs and also that it has the potential to be more customizable than the BlackBerry or Apple operating systems.

It also integrates features such as Gmail and Google maps into the phone and includes a marketplace for downloadable applications, designed to compete with the successful Apple App Store.

While Nokia has previously announced plans to open source Symbian, the offer has yet to find much uptake among other hardware vendors.

Android, meanwhile, is on a tear. Samsung has one Android model out in Europe now, the I7500, with two coming here, while Motorola is pinning hopes of a comeback on several Android smartphones slated to come out by the fall. HTC partnered up with T-Mobile to introduce the first -- and so far, the only -- Android phone stateside, the T-Mobile G1, which hit 1 million in sales recently. The two are expected to issue a follow-up this summer as well.