Another Nokia setback: X7 smartphone for AT&T canceled

Things aren’t getting easier for Nokia in America. The company has canceled the launch of its X7 smartphone, which was supposed to be available on AT&T exclusively this year, according to the Wall Street Journal.

The cancellation comes only a few weeks before the Mobile World Congress event in Barcelona, where Nokia was planning to unveil the X7. Getting a new phone on AT&T would have been a major score for Nokia. The X7 likely wouldn’t have been a hit with US customers, but by being available as a subsidized offering on AT&T, it at least had more of a chance at success than its sibling the N8, which is only available in the US directly from Nokia for $469 (it launched at $549 in October).

One person close to Nokia told the Wall Street Journal that it canceled the device because it didn’t think the X7 would receive enough carrier subsidies and marketing from AT&T. The phone will still find its way to other markets, and of course, intrepid Nokia fans in the US will still be able to get their hands on the device somehow.

Let’s be clear: The X7, at least on paper, didn’t appear to be a groundbreaking device. But it was an important product because Nokia has yet to offer a carrier-subsidized smartphone that can compete with the likes of the iPhone or powerful Android phones, which generally retail for $199 or less with two-year contracts. Now, once again, Nokia is going to be stuck with a high-end product that no US consumer in their right mind would buy.

There’s a small amount of hope for Nokia on the horizon with the impending launch of its MeeGo operating system, but the company hasn’t yet announced when it will be available. For now it’s stuck with Symbian, an operating system that ruined the N8’s powerful hardware for me. Perhaps now the possibility of Windows Phone 7 on Nokia devices doesn’t seem so crazy after all.