Nokia doubling down on “cheaper than Lumia 610″ smartphones to fight Android
Showing his continued support for Windows Phone, Nokia CEO Stephen Elop maintained the problem was not with the platform but the way they are being sold during a call with investors yesterday. The trick, according to Elop, is to go after Android aggressively by retailing devices cheaper than the Lumia 610 and that Nokia was already developing them.
He mentioned “specific support” Nokia received from Microsoft to achieve these low price points, which would be critical for Nokia in countries like India and China. This is not the first time Microsoft is giving Nokia “specific support” as Elop puts it. Microsoft was instrumental in subsidizing the Lumia 900 to $99 on AT&T when most LTE-enabled smartphones were priced at $299.
Pricing alone, however, cannot ensure success. Nokia announced a bleak outlook for the second and third quarter, where it pointed out that “competitive industry dynamics are negatively affecting the Smart Devices business unit to a somewhat greater extent than previously expected.”
Considering the Lumia 900 was the only major launch in the second quarter, we believe it did not do as well as Nokia anticipated. This would be a big blow to the Finnish handset vendor considering it had its hopes pinned on the Lumia 900 to make a great first impression on the American market. Another point to be noted is that going to even lower price points, while necessary, will only mean lower margins for Nokia.
This could be a downward spiral than Nokia has gotten itself into however, all it needs is one big hit to get right back into the game. Will it come in time before Nokia hits rock bottom? We certainly hope so.