T-Mobile USA, the No. 4 U.S. mobile service, plans to market the Lumia 710 phone from Nokia to first-time smartphone buyers as the two companies push to recoup market share losses of recent years.
T-Mobile USA plans to sell the device, which runs on Microsoft Corp's, Windows operating system, for $49.99 from January 11, missing the key holiday-sales season.
This will be the first smartphone to hit the U.S. market from an alliance Finland's Nokia forged with Microsoft earlier this year.
The device will be a U.S. exclusive for T-Mobile, according to Andrew Sherrard, a T-Mobile USA executive who hopes the relatively low price will convince some of the 150 million U.S. consumers using more basic phones to switch to smartphones.
Sherrard said he expected to expand T-Mobile's portfolio of Windows-based phones in the coming year.
The U.S. introduction of the phone will be a key one for Nokia, which has suffered badly here in recent years as U.S. operators have spurned its devices in favor of the Apple Inc iPhone and Android models from rivals such as Motorola, HTC Corp and Samsung Electronics Co Ltd.
Nokia's share of the U.S. smartphone market will be around 1 percent in 2011, according to Strategy Analytics analyst Neil Mawston.
Nokia had promised in October that it was regaining U.S. operator support and would have a portfolio of new products for the U.S. market starting early 2012.
Chris Weber, the head of Nokia's U.S. business, said the company would push hard to give operators a reason to carry Nokia devices.
(Device) exclusivity plays a big part in that, Weber told Reuters.
Since T-Mobile USA is the smallest of the national U.S. operators, Nokia investors will be anxious to hear when it expects to sell the smartphones with the bigger carriers like Verizon Wireless, AT&T Inc and Sprint Nextel.
We'll have a full portfolio with multiple operators at multiple price points in the U.S. market in 2012, Weber said.
AT&T is trying to buy T-Mobile USA, but they are fighting for approval of the $39 billion deal, which is facing opposition from the U.S. Department of Justice and the Federal Communications Commission.
If that deal succeeds, the combined company would become the biggest U.S. mobile operator leapfrogging Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.
(Reporting by Sinead Carew; Editing by Lisa Von Ahn)