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Nokia bets on lower-priced Lumia to open up smartphone sales

Nokia Lumia 610

Nokia Lumia shipments are strong

Nokia is hoping a lower-priced smartphone can help it supercharge sales by reaching emerging markets as well as a younger audience.

While Nokia ships a significant number of mobile phones worldwide, the company continues to struggle to gain a meaningful presence in the smartphone space. The new Lumia 610 is the latest in the Lumia series that operates on Windows Phone and is its lowest priced entry yet at $254.

“The question is whether this is going to play well in their stronghold of emerging market, where Nokia is trying to move these into,” said Carl Howe, vice president of consumer research at Yankee Group, Boston.

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“The problem is that Windows is not well known in emerging markets,” he said. “Nokia is going to have to start from zero to sell this to people for whom it may not be their first mobile phone but it is their first smartphone.

“The nice thing, compared with Symbian phones and Android, is that Windows Phone is a much smoother and more fluid experience. It may have a significant amount of appeal.”

In the mix
While Nokia holds either the top spot or the number two spot when it comes to mobile phone shipments, its strength is based on lower-priced feature phones. The company has struggled to build a strong presence in the smartphone market, where it is in the process of transitioning from the Symbian operating system to Windows Phone.

Nokia’s smartphone market share dropped from 33.4 percent in 2010 to 15.8 percent in 2011, according to recent data from Strategy Analytics. The company said it sold more than one million Microsoft Lumia phones since October.

The lower-priced Lumia 610 could find an audience in developing market and in markets such as Europe where carriers do not subsidize the cost of a new phone.

According to the company, the Lumia 610 was designed to introduce Windows Phone to a younger audience by providing instant access to social networks and bringing all mobile, email, Facebook, Twitter and LinkedIn contacts into one place. Users can also access games through Xbox Live.

The phone comes in bright colors such as cyan and magenta and has features such as a 3.7-inch LCD display, access to free Nokia apps, 8GB of internal storage and 256MB of RAM.

This is Nokia’s fourth Lumia smartphone designed for Windows Phone. It will operate on the latest Windows Phone 7.5 software release, which supports lower memory and processor requirements.

With the latest Windows Phone release also including network and language requirements for China, Nokia plans to make a range of Lumia phones available in China.

“Nokia’s big challenge is their average selling price, which we are estimating to be $72,” Mr. Howe said. “That is really low.

“The irony is that they make good money on those low priced phone because of the volume,” he said.

“Windows is going to change that formula since it is a much more expensive phone. However, it is not going to be a significant part of their mix for three to five years.”

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Software and technology, Nokia, Windows Phone, Lumia, smartphones, Yankee Group, Carl Howe, mobile marketing, mobile

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