Nokia has reportedly canceled the U.S. release of a smartphone that was slated to launch exclusively this year with AT&T Inc., the Wall Street Journal reported today, citing people familiar with the situation.

Nokia had intended to debut the X7 smartscfeen phone in exclusively with AT&T ahead of the Mobile World Congress trade show next month in Barcelona, Spain. However, Nokia decided to pull the phone because it believed the X7 wasn't going to receive enough marketing and subsidies support from AT&T, the WSJ said, although the company still plans to launch the X7 in other markets.

The cancellation leaves Nokia further behind in its effort to correct a major strategic weakness in the U.S. market, where it lags Apple, Research in Motion and phones powered by Google 's Android software.

The X7 is powered by Nokia's Symbian operating system. However, the company is building its new high-end smartphones around Intel's a MeeGo platform, with the first devices to launch this year.

Nokia is currently offering its N8 smartphone without carrier support in the U.S. for $469.