Struggling cellphone maker Nokia has found a software bug in its new flagship Lumia 900 model, dealing a blow to its ambitions to re-enter the lucrative U.S. smartphone market.
The glitch, which Nokia said on Wednesday it would fix early next week, can in some cases cause the phone to lose its data connection.
Nokia lost smartphone market dominance to Apple and Google in part due to its weak performance in the United States and the Lumia 900, which uses Microsoft's Windows Phone software, is key to its comeback bid.
It's like they stalled their engine when everybody is looking at them at the start of their race, said Gartner analyst Carolina Milanesi.
The Lumia 900 went on sale in the United States through AT&T on April 8 and is due to launch globally this quarter. The model won several awards at the Consumer Electronics Show in Las Vegas when it was launched there in January.
This is not the best time for this, said John Strand, founder and chief executive of Strand Consult.
Nokia said the problem was related to phone software, not to hardware, the network or the Windows Phone operating system.
A memory management issue was discovered that could, in some cases, lead to loss of data connectivity, Nokia smartphone unit chief Jo Harlow and Nokia U.S. chief Chris Weber said in a joint statement.
Nokia said a software update, fixing the problem, would be available around April 16.
The firm said it would offer anyone who has bought a Lumia 900 phone, or who buys one by April 21, a $100 credit to their AT&T bill. The operator sells the phone for $99.99 with a two year contract.
They really did not need it particularly in this market, but I like the way they are dealing with it, Gartner's Milanesi said.
Shares in Nokia were little changed from Tuesday's close, slightly underperforming a 0.2 percent firmer European technology shares index.
(Reporting by Tarmo Virki; Editing by David Cowell and Mark Potter)