X7, Nokia’s new smartphone that it had planned to enter the market with partner AT&T, has been cancelled. Nokia had planned to make a comeback into the US market with this phone in partnership with the wireless carrier AT&T. AT&T is at the second position in US in terms of market presence just behind Verizon Wireless.

This is another aborted attempt by the Finnish mobile giant to seek a foothold in the US. Nokia at one time had a large presence in US and it is the largest phone maker in the world. It was rumored to be launched in partnership with AT&T. Wall Street Journal cites the reason for the cancellation as AT&T’s refusal to commit funds for marketing or subsidy.

Nokia, however, refused to comment on this issue and said that it is a well publicized fact that they are working hard to regain leadership in the US market and that they are in active discussions with their operator partners on this strategy. They further stated their commitment with their US carrier partners to bring meaningful smartphone solutions to the market that are compelling consumer experiences, have strong operator support and a thriving ecosystem. As in any business, plans can change and deliberate decisions must be made to enable clear focus on bringing the right products to market at the right time.

Nokia has encountered problems with negotiating with the carriers who subsidize handsets for customers in return for two year contracts. Nokia on the other hand prefers selling the smartphones launched in US directly to the consumer at its own set price.

Nokia is still dependent on its Symbian OS with MeeGo still under development. Stephen Elop, the new president of Nokia, is now busy working out a strategy to sell better products at more competitive pricing to regain control in the US market and to make a move against his main competitors in the market, namely Apple’s iOS powered iPhone and Google’s Android platform.