Desperate Nokia Cuts Smartphone Prices In Europe

by Gaurav Kheterpal on July 6, 2011

Nokia has mastered the art of making wrong moves at the wrong time. Over the past year, the Finnish giant adopted new mobile operating systems only to scuttle them months later, hired and fired the wrong people, put all its eggs in the wrong smartphone basket, and then finally screwed over all its current customers and partners by dumping Symbian in favor of Microsoft.

Therefore, it didn’t surprise me when Nokia announced that it was anticipating the sales for its Devices & Services division to be “substantially” lower than the estimate of 6.1 –  6.6 billion Euros ($8.8 $9.5 billion) it gave back in April. The much-hyped Nokia N9 proved to be a non-starter as the company has already publicly stated its intent to no longer support the N9’s mobile operating system, MeeGo.

In yet another desperate move, Nokia has reportedly slashed its smartphone prices in Europe by as much as 15 percent. Though Nokia maintains that the price drop is a “business as usual” exercise, there’s no question that the Finnish giant is under severe pressure to regain its diminishing market share in the smartphone segment.

As per sources, Nokia is cutting the prices of the following devices by 15% – its flagship model, the N8, the multimedia phone C7, as well as the business user-targeted E6. Though price cuts are considered a routine quarterly exercise in Nokia’s history, the Finnish giant has refrained from doing so in the last couple of years.

IMO, the price cuts are a good move as Nokia needs to keep up the sale of its Symbian devices till its WP7 devices are ready for launch. Chief Executive Stephen Elop remains bullish on the prospects of Symbian and expects Nokia to sell another 150 million Symbian smartphones before it makes the switch over to Windows Phone 7. Nokia isn’t finding many takers for its smartphones through the operator subsidy model so it makes sense to incentivize the older products for end customers. Nokia says it’s on-track to launch a WP7 phone before the end of the year and mass production is expected to begin in 2012.

Nokia is expected to release 4 Symbian Belle smartphones each having 1 GHz processors. It would be interesting to see if the company decides to pursue an aggressive pricing strategy for these future offerings.

In fact, Apple has used the ‘price cut’ strategy to great effect to sell older iPhones at reduced prices in order to clear its inventory.  However, Nokia is no Apple and I strongly believe that despite the lower price tags, the Finnish smartphone maker will continue to lose ground to iPhone and Android devices.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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