Monday, July 16, 2012

Nokia halves price its flagship U.S. device, the Lumia 900

Nokia has halved the U.S. price of its Lumia 900, slightly more than three months after the launch of the smartphone on the AT&T network.

The Lumia 900 hit the market at AT&T in April. Prior to the launch, both Nokia and AT&T said they considered the device a flagship phone, and considering that, its price of $99 on contract was already quite low. That said, as of Sunday morning, the price had been halved to a new price of $49.99 with a two-year service agreement.

The Lumia 900 has had a series of missteps. Not only was it launched on Easter Sunday, a day when most AT&T stores were closed, the company released it with a software bug, that it was forced to confirm - and patch - post-launch.

Furthermore, the Nokia Lumia 900 is underpowered compared to newer phones - which we already recognized. More to the point, however, the phone will be unable to be updated to Windows Phone 8, coming later this year. It can be updated to Windows Phone 7.8, but that is small comfort to anyone considering a purchase.

Cell phone price reductions aren't uncommon in the U.S. market. However, Nokia's comes just a few days after asymco's analysis of comScore and Nielsen data showed that Nokia has 0.3 percent of the U.S. smartphone market, amounting to approximately 330,000 Lumias, overall.

The Espoo, Finland-based company reports earnings this coming Thursday.

In terms of its stock, its market market capitalization has plummeted to about €5.6 billion (or $6.86 billion), representing an over 95 percent decline from its peak during the IT boom at the turn of this century. Compare that to Apple, which has a market capitalization of $565.68 billion.

Apple's last reported quarterly profit was about twice Nokia's current market capitalization.

Some have speculated that Microsoft might rescue Nokia by acquiring it. At its current market cap, Nokia is far cheaper than the $8.5 billion Microsoft paid for VOIP company Skype last year.

No comments: