Nokia has cut the price of its Lumia 900 to under $50 in the US following poor initial sales with more pain due at its quarterly earnings call this week.
The Nokia Lumia 900, which has been on sale in the US for four months on the AT&T network, is now available for $49.99 on a two year contract having previously cost $99.99. The decision comes after it was suggested that Nokia had sold only 330,000 of its Lumia smartphone in the US since launch.
This figure comes from the Asymco consultancy who analysed the latest data regarding smartphones from comScore and Nielsen which shows that Android smartphones account for over half the smartphone market and Apple's iPhone hold around a third of the market.
Asymco admits the 330,000 figure is an estimate, and Nielsen has said it does not agree with using its data in combination with comScore figures as they use different methods of analysing data.
Life Cycle Management
A spokesman for Nokia said the price cut "is part of our on-going lifecycle management, which is jointly done between Nokia and carrier customers". He said a price cut is not unusual at this time in a smartphone's life cycle, noting that Samsung has cut the price for its Galaxy S2, launched before the Lumia 900.
Nokia will announce its Q2 2012 set of financial results on Thursday and the consensus is for another poor set of figures. Analysts polled by Reuters last week expect a loss in the handset business of €236m, worse than the €127m in the first quarter.
Last month Nokia warned of worst-than-expected losses in its handset business while announcing the layoff of 10,000 employees as well as the closure of its operations in Finland, Canada and Germany.
Nokia's share price this morning fell to just €1.46, having fallen by over 95 percent since October 2007 when it hit a high of €27.74. The company lost its title as world's biggest mobile phone seller to Samsung earlier this year, a title it had held since the late 1990s.
Fallen from grace
Nokia fall from grace is related to its failure to adapt to the smartphone explosion ignited by the launch of the iPhone in 2007. The iPhone, and subsequently Android-based smartphones, changed the face of mobile technology but Nokia failed to grasp the importance of the change, and instead stuck with its Symbian OS for too long.
Last year Nokia's new CEO, Stephen Elop, announced Nokia was dumping the Symbian platform in favour of Microsoft's new Windows Phone platform. The Lumia range of phones - which includes the 900, 800, 710 and 610 - are the first result of this partnership.
While the Lumia 900 was generally well received in the media, sales have been slow and competition from high-end phones like the Samsung Galaxy S3 and the HTC One X have seen it struggle to win customers.
The Lumia ragne is hamstrung to a large extent by the hardware restrictions imposed by Microsoft on manufacturers using its Windows Phone 7 software. For example, the OS only supports single-core processors while the current crop of high-end Android phones feature quad-core processors.
Nokia faces more problems convincing customers to buy the Lumia smartphones after Microsoft announced they would not be getting the upgrade to Windows Phone 8 when it launches later this year, meaning a lot of customers could hold out until the new software launches instead of buying one of the current crop of Lumia phones.