O2 left out of UK N97 launch

Telefónica’s British operation O2 will be the only carrier not to offer Nokia’s new flagship the N97 when it launches in the UK on June 19th.

While the Carphone Warehouse will be selling the handset with contracts to O2’s network, the N97 will not be available in O2’s stores, or from its online shop.

Vodafone, Orange, T-Mobile and 3UK will all be offering the handset, which Nokia will sell SIM free for £499. The N97 will be the first Nokia handset to launch with one-touch access to the Finnish vendor’s app store, the  Ovi Store, which launched last month.

An O2 UK spokesperson effectively ruled out any chance that the firm would sell the handset. “We have no plans to sell the Nokia N97 through our direct channels,” she said, adding: “We offer a range of handsets through our product portfolio, which is regularly reviewed to meet the demands of our customers.

Nokia, meanwhile, refused to comment on why the largest carrier in the UK will not be stocking what is arguably its most important new product since the iPhone shook up the high end handset market two years ago.

Analysts have speculated that it is the iPhone – and specifically O2 UK’s exclusive distributor status for the Apple product – which has led to the carrier’s exclusion from the N97 launch. Dave McQueen, principal analyst at Informa Telecoms & Media, said it was believed that O2 had exhausted its subsidy budget with the costly iPhone and had been unable to offer the N96, when that launched, as a result.

The current situation could simply be a continuation of that problem, he said, given O2’s ongoing commitment to the iPhone and the carrier’s reliance on the product for driving its consumer data traffic. iPhone users are renowned as far more data-hungry than users of other handsets. “In addition, it is very likely that O2 can’t commit to marketing budget for N97 as they are likely to have to co-market the iPhone in June / July, most probably when  a new iPhone comes out,” McQueen said.

Alternatively, this latest development could be decision taken by a disgruntled Nokia based on O2’s decision not to offer the N96.

Tony Cripps, a handset market analyst at Ovum suggested that Nokia might be concerned at how much fanfare O2 would be able to give the N97 in its marketing strategy. “Perhaps Nokia thinks that going through O2 with what will be its flagship handset for some time may not get it the attention it thinks the phone deserves,” he said. He added that a good deal of the prospective market for a high end smartphone like the N97 among O2 users would already be iPhone users.

Nonetheless, O2 will doubtless have a substantial number of Nokia loyalists on its customer books and it may run the risk of losing those to competitors who want the latest product from the Finnish market leader.