In this post, we are going to deal with price issue with Nokia Lumina Phones which few market experts complain as little higher than they deserve. The British global bank Barclay Capital analyst Jeff Kvaal came forward with a suggestion that Nokia can potentially lower the prices for its Nokia Lumia 710 and 800 models. There were already reports about successful launch of the Lumia 800 in European markets, but some analysts say that the reactions are exaggerated.
Kvaal advises Nokia to cut the price for these two models by 17 percent by making some changes in technical and design specifications of the handsets. The analyst points out that currently the production cost is $238 for the Nokia Lumia 800 and $167 for the Lumia 710, but they are sold in the market respectively for 420 EUR ($560) and 270 EUR ($360).
Here is what Kvaal suggests to do on the example of the Lumia 710: “First of all, Nokia can reduce the screen size of the phone from 3.7 inch to 3, and replace its “ClearGlare” type with an ordinary TFT screen. This operation will cut the production price by $5. RAM reduction from 512MB to 256MB will cause another $5 cut. Kvaal goes on to suggest reducing the band connectivity on both phones (Lumia 800’s quad/band and Lumia 710 triple/band connectivity) and make them work with single/double band, which will cut another $3 from the Lumia 710’s production”.
And also he added “Both devices have the same 1.4GHz processor, but the analyst advises to replace it with a 1GHz CPU, which will make them work with a smaller battery. This will bring another $2 reduction. Then Kvaal does not want the Lumia to have a compass and a back-facing camera, cutting successive $10, plus he says a cheaper provider for Wi-Fi and a printed circuit board can be selected. All in all, these changes will amount to $38 or 17 percent reduction in production price of the Lumia 710”.
Now we’re asking — is it a good idea to cut the cost of a phone by lumping many useful features? In the fierce completion of the current mobile market, Nokia will go for a great risk if it agrees with Mr. Kvaal’s suggestions. Imagine for a moment how Nokia announces its cutting the price… but then admits at what
cost it was done.
Just the logic of technological progress and how it is lodged in the minds of consumers is incompatible with these changes suggested by Kvaal. Nokia can eventually lower the prices for these smartphones due to other factors, but not at the cost of their performance. Particularly, I would like to stress the importance of the processor power and RAM for the phones’ accurate and fast performance under Windows and multitasking. With all this, it’s not hard to guess that Jeff Kvaal’s suggestions will not go further of the theoretical dimension.
Source : Forbes