Nokia dropping phone prices, going in for the kill
By Nilay Patel 
posted Jul 31st 2008 12:35PM
posted Jul 31st 2008 12:35PM
Nokia's doing far better than rivals like Sony Ericsson and Motorola, but it's not going to let up while it's ahead -- the cellphone maker is reportedly cutting prices across the board in order to increase pressure on the competition. The biggest cuts are on the 5310/ 5610 music phones and the 8GB N81, but most other handsets have seen price decreases of up to 10 percent as well. The move is something of a surprise, with one analyst calling it a "Crazy Ivan," which is probably the first time The Hunt For Red October has ever been employed to describe the actions of a multinational corporation. So, Espoo -- does this mean the Tube is going to be crazy cheap, or what?[Via Phone Scoop]
Hm, N81 sounds neat. I'm in need of a new phone
I'm in too, I hope the cuts are also on the special edition N81 8GB.
I guess when they called the 5800 Tube a "mid-range" phone they were up to something.
I like the move. Beat the competition while they're ahead. Also, by cutting prices, I'm pretty sure sales will jump (ex. Centro). As RIM is heading towards global handset status, this will surely slow that down, while it will prevent Nokia from losing market share to Apple as analysts are predicting.
And Nokia fans won't whine and bitch about trying to get a refund because they adopted early!
I guess by mostly ignoring the USA market, they are going gangbusters.
Sweet...Now if others would follow
It's a good move to take all out from the dominant position they are currently by smoking Moto and SE even more when they really don't have many hit phones out there.
About Apple people still need to remember that Apple is taking customers mainly from Moto and other companies that are strong in North America not to say that Apple wouldn't have some affect to Nokia's sales now too after 3G iphone came out even if Nokia have raised their market share all the time.
5800(Tube) should indeed be rather cheap and maybe they are setting prices for new line of phones coming.
The Tube is not really the iPhone competitor. It is simply a quick low-end "test" for Nokia. The true iPhone competitor is rumored to be the Nokia E77, which will be released late next year, most likely around the time that an iPhone 3.0 can be expected
Been reading Eldars articles? :D
Yeah i know, but you can be sure that people here in Engadget will compare those 2 if people compare something like N95 and iphone.... everything can be possible.
5800 main point will be the price because it's a fact that it wont be as much of eye candy as iphone those who are expecting it to be something different than S60 just made for TS use and a bit more eye candy than fp2 will probally be disapointed.
Looking forward that E77 it might actually have totally new OS in it....
Get out of town... up to whopping 10%! Those crazy Nokia execs. Now I can buy $100 phone for only $90 or so. Woohoo! Free $10!
An extra 10% in a low margin business is quite significant. This will likely affect the stock in a negative fashion in the short term because their EPS will be lower.
Since selling a phone that costs 80$ to make for 60$ is a goddamn genious idea.
Uhm, honey, when the hell was cellphones, in general, a low margin business. Sure, some cellphones, like the Centro, are sold at very attractive price points (although Palm is likely getting a subsidy from the carrier to supplement their bottom line). But most phones, when the subsidy is included, are sold at far more than the value of the hardware and the software.
Hi honey, Is a net profit margin if 8.24% high in your book?
Apple which is touted as a high margin electronics company has a net margin of 14.36%
Microsoft, on the other hand 27.13%. That's a high margin business IMO
0megapart!cle @ Jul 31st 2008 2:16PM
Uhm, honey, when the hell was cellphones, in general, a low margin business.
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Exactly, but I'll offer some context to all this:
Posters generally from the USA associate Nokia with low-priced phones, and therefore, everything they do as low-priced and low-quality. Apparently they are not big in the USA. In Australia (from first-hand experience) and most of Europe (as I understand it) it's quite different. At least the perception is.
Not everyone is as ballin' as you, sir NutMac.
Do North Americans really take Nokia products as cheap?
Because that would be kinda funny as Nokia owns those expensive segments first with smart phones and secondly with the premium phones 8xxx series and the super luxury phones Vertu.
Plus Nokia as a brand is actually most valued from Europe. Thought i guess it's not too much of suprise as Nokia phones aren't really sold in USA, right?
I'm basing the margin thing on their published financial reports. Has nothing to do with the phone costing $1 or $1,000. Nokia's net margin is 8.4%, which is low compared to, say Rim (21.52%)
Not sure where you have gotten those numbers, but anyways example Nokia's profit rose 8% in last Q(Q2) while most of the new models are coming out this Q or have come out now.
Yeah, In the U.S. Nokia's are mostly considered crap phones. That's because they mostly (maybe even only?) "sell" old and low end models, generally bundled as sub $50 or even free phones with a service agreement with a Provider.
Seeing all the reports about people modding/hacking or simply generally loving their "awesome" Nokia's was rather confusing at first. They don't really advertise much here, and the internet aside, you really don't see them much at all until you mention the keywords: broke, cheap, free to the guys trying to sell you a 2-yr contract.
S-E's best hope was/is the X1. Unfortunately I think it's too little too late. And Motorola? Hey, I liked you guys. I loved the Moto Q, but with it's crippled WiMo, it just didn't cut it.
I'm not sure if X1 is really important for SE. Given the impressive amount of almost equal consumer class cell phones they've got, you'd assume that's where they put their money (and losing it, apparently).
Apparently the Q9h has killer call quality/ speakerphone/ reception, which makes me wonder if it's worth dropping some money on.
10% off Vertu too? HOLY CRAP! Maybe I can afford one now...nope.
And on a side note, am I the only one still hoping for a US 3G E90?
hate to break it for you guys, but this is not at all surprising, nokia (just like every other electronics manufacturer) lowers the prices of the models as they get older. nokia does larger drops couple of times a year, last time was in february. btw, this price drop was reported on july 21st already and in unrelated "news", sonye dropped their prices on 16th.
you guys are new in following technology or something?
There are ways of speaking to people which do not require you to sound like a jackass. You have some good things to say but unfortunately, your unrequited bullishness puts me off heeding your words.
@Raheem
you must be new to engadget
Nah, I just hate when people can't keep a civil tongue.
Yes much of the market share comes from low end(like 1100 with over 200 million sold have shown), but huge amount of the profits come from mid and high end phones so it wouldn't make much sense. 6300 was Nokia's key product last year that sold by truck loads after that started to slow down, 6500 slide and classic did take it place.
i was being rhetorical =)
I was being Raheem.
oh cmon, a "web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics" since march of 2004 reports that price reductions in electronics gadgets are surprising, and you're not allowed to write a jackass comment?
surprising price reduction is when the price of the most hyped mobile phone ever is slashed 1/3 after couple of months of its introduction, not nokias routine cuts of 10% of the price of mobiles introduced almost a year ago.
sam @ Jul 31st 2008 4:09PM
surprising price reduction is when the price of the most hyped mobile phone ever is slashed 1/3 after couple of months of its introduction, not nokias routine cuts of 10% of the price of mobiles introduced almost a year ago.
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Haha. Was waiting for someone to say it. Agreed :)
I... Would like to have seen... Montana....
*dies*
^lol
Though, Nokia is Finnish. Shouldn't this be a "Crazy Olli" or something?
The 6220 was only £250 unlocked *before* this move. I can't see any other manufacture competing at that price.
Forced move since their product line-up is old compared to competitors.
+1
They'll be late with their 8mp camera phone (but I hope they'll spam us with variations).
Geez why not 25% cut on the music phones and the Nseries and no cuts on the rest? Much of Nokia's market come from very low-end phones, so doesn't make sense cutting some per cent there. Cutting the 5610 price by a quarter, however, would really send a strong message to Moto, SE and even Apple... Nokia is still king!
Those who get high-end phones get them for the Symbian, those who get low-end phones get them since they are cheap and the colour is good.
Yes much of the market share comes from low end(like 1100 with over 200 million sold have shown), but huge amount of the profits come from mid and high end phones so it wouldn't make much sense. 6300 was Nokia's key product last year that sold by truck loads after that started to slow down, 6500 slide and classic did take it place.
This news is hilarious. My GF just picked up the 5310 last night. We are getting a new couples plan and she wanted the 5310 ( if you didn't know it is super thin and quite a nice phone). She called me all excited that the price had dropped to 20 bucks on with our new plan. Not too shabby and she loves the phone. Great camera and dedicated music controls.
oh yeah? well i was hangin' out with George Clooney a bit yesterday and he went on and on on the same thing, so i said "hey look Georgio, I gotta get rollin' now but good look on that phone thing"
Screw that, I was with Her Majesty the Queen yesterday, and I'm all like, "Hey Her Maj, you seen those Nokia price cuts?" And she was all like, "True dat Raheem, they be slashin' sterling like I be feedin' corgis."
lol
Price cuts are always good to hear. I think Nokia should use the strategy of giving all their handsets away for free in order to increase market share. It won't do much good in the smartphone sector, however. Apple already has that sector sewn up. The only way Nokia could make headway is to pay people to use their smartphone handsets. Excellent strategy to hold market share in that sector.
My avatar would be happy to use Nokia smartphones. Especially the N95. He agreed that if they gave him plenty of bananas a month in place of money, he would be happy to carry one. He thinks the N95 isn't all that great of a browsing handset, but it takes great pictures of all his chimp friends in heavy forest cover due to its high megapixel count and fine flash.
iPhone is not a real smartphone, and the market share isn't that big.
Is it a joke?
@avester
Iphone is a smartphone, i do understand what you want to say concerning the Ctrl C, Ctrl V issue as well as the true multitasking capabilities but you should know that the Iphone is smart enough for many people(though i am not in that league, and i suspect you re not)
@Steffen Jobbs
"It won't do much good in the smartphone sector, however. Apple already has that sector sewn up" pls pass me some of the weed you are smoking
You shouldn't refer to yourself in the third-person.
@bjay, no proper 3rd party software support (I don't call having a monkey racing game and ebay proper) and the lack of multitasking are a big flaw, my N-Gage from 2003 does them both, and the phone was 200€ without contract, that's around 1/3 of the cost of the iPhone..
There's a good article about this price drop in Symbian-Freak http://www.symbian-freak.com/news/008/07/nokia_cuts_phone_prices.htm
These price cuts are pretty much directly towards SE as it's Walkman phones are the ones that at least sell someting currently. Nokia is trying to use it's position to give some more shaking to them.
Which is copied 1:1 from Reuters. Without even mentioning the source. LAME!
http://uk.reuters.com/article/technology-media-telco-SP/idUKL170723620080731
Source is marked as http://news.yahoo.com/s/nm/20080731/tc_nm/nokia_prices_dc
Dunno if they just added that.
Will the N81 work with 3G in the usa, att?? if so my iphone might be for sale. I miss the real functionality of the nokia phones, not restricted software like with the iphone.
Nope, there's only an Euro 3G version of the N81...
The only newer high-end Nokias with 850/1900 MHz 3G are the N78, N95 (8G), E71 and E66...
The N96 is out on 1 October so I suspect the N95 and N95 8GB will get price drops too.
I really hope for their own good that N96 isn't ment to be anything else than silly niche product like N77 was with the DVB-H as well.
It's an evolved N95 which isn't a bad thing. The TV's a gimmick though but it's a minor feature.
Hunt for Red October? I would have said Serenity. "Nice Flyin' Baby!"
My 5610 MX just got the 4th firmware crash, and I don't even bother go to Nokia service center again!
Nokia doesn't deserve their reputation, while the quality is unstable and customer service is a bia*tch!!!
I've had a nokia like since ...... forever ..... and I never went through such things.
If u dont like Nokias dont buy them.....end of story.......
so what is the current version of Snake by now?
Nokia was a brand in the US sucks....try going on AT&T's or T-Mobiles site/store and look for one of nokia's "mid-high-range" models, you aren't going to find it, I don't think any of their N series phones are offered thru a carrier or many of their high ends either
Nokia every where else: Big....very big....
The problem here might not just be with nokia's lack of us market caring, but more with the fact that in the US we have two cellular technologies GSM and CDMA EV-DO, which nokia doesn't care about ev-do at all...or at least doesn't seem to show it
10%? Thats it? N95-4's on contract (Rogers wireless via The Source ) are going for 80, and ten percent is a big deal? Thanks iPhone!
Crazy Ivans are not specific to The Hunt for the Red October. If it was a movie/book reference at all, it is far more likely that it was to Firefly.
http://en.wikipedia.org/wiki/Crazy_Ivan