Reuters/Helsinki
 |
|
The new Nokia Lumia 920 is displayed at a news conference in New York on September 5. Nokia will struggle to explain the premium on the Lumia, seen as potentially its last chance to break into the lucrative smartphone segment and catch Apple’s iPhone and a string of other popular phones like the fast-selling Galaxy, say analysts |
Analysts said Nokia will struggle to explain the premium on the Lumia, seen as potentially its last chance to break into the lucrative smartphone segment and catch Apple’s iPhone and a string of other popular phones like the fast-selling Galaxy.
The Lumia, which with its rounded edges and colourful covers look similar to its predecessors, was unveiled earlier this month and drew a thumbs down from many analysts who said it lacked the “wow” factor to challenge its rivals.
It uses Microsoft’s Windows Phone 8 software while Samsung Electronics’ Galaxy S3 operates on Google’s Android system, the platform favoured by many smartphone makers.
“Windows Phone is still largely an unknown to consumers - they would probably expect to pay less if they are taking a risk,” said Ovum analyst Nick Dillon. “Hardware-wise they are pretty similar, it would be hard for Nokia to justify that extra cost to consumers.”
Windows Phone has just around 3% of the global smartphone market, while the Android platform controls two-thirds of sales. Apple has around a quarter.
Nokia said Swedish carriers would sell the Lumia 920 for around 5,700 Swedish crowns ($860), excluding subsidies. This compares with 4,515 crowns asked for a Galaxy S3 at Expansys, one of the leading online phone stores in Europe.
In Italy, the Lumia 920 will sell for €599 ($770), compared with €530 for the S3, which has been on the market for four months.
The S3 retails for €530 in Germany, where Nokia will ask €649 for the Lumia. In Russia the Lumia will sell for 24,990 roubles ($800), some 10% above Galaxy S3.
“Nokia will find it difficult to command a premium over Samsung’s Galaxy S3 which is the pricing benchmark for a non-Apple flagship smartphone,” said Ben Wood, head of research at British consultancy CCS Insight.
Once the world’s biggest mobile phone maker, Nokia fell behind rivals in smartphones and has racked up more than €3bn in operating losses in the last 18 months.
Samsung sold 20mn of the Galaxy S3 handsets in three months.
Apple remains confident of its ability to command a premium, selling its new iPhone 5 well above prices of Nokia and Samsung flagship models.
Smartphones to go on sale in November
Nokia Corp said yesterday its latest Lumia smartphones will go on sale in key European markets in November, finally ending a long silence over its marketing plans for the new devices that were launched earlier this month.
The high-end Lumia 920 and its cheaper 820 version, that run on Microsoft Corp’s new Windows Phone 8 operating system, will hit shelves in Germany and Italy in mid-November and will be on sale in Sweden, Denmark and Russia during the final three months of the year, the company said.
Nokia’s launch of the new Windows 8 phones earlier this month was much anticipated but a lack of information on when sales would start and on pricing disappointed investors.
The pricing is “exactly where one would expect it to be,” industry analyst Ben Wood at research firm CSS Insight said. “Given that Italian operators don’t have a history of subsidising devices, prices in Italy are usually relevant to look at,” he said.
The new Lumia devices are expensive to make due to their large screens, wireless charging and the inclusion of a chip to allow near field communication, a technology that allows the wireless transfer of data over distances of a few centimetres, Wood said. They are also likely to stay in the sales channel for a longer time than previous Lumia devices, that were more aggressively priced from start.
“I’m sure that Nokia is pricing its new Lumias as aggressively as it can, but at the same time it needs to maintain pricing integrity,” he said.