Nokia is slashing the prices of its current line of smartphones, as the company strategizes to boost sales while it readies its Windows-based phones.
Nokia called the price drops normal and wrote them off as part of ongoing business. But the scale of the price cuts is so unusually large that industry insiders see this as a move to reverse Nokia’s slowing sales.
The drops come just a few weeks after both Samsung and Apple were predicted to surpass Nokia’s global smartphone shipments later this year. Nokia had been the number-one manufacturer of cell phones since 1996, but has failed to keep up with the competition in the surging smartphone market.
Nokia may be clearing inventory as it readies the launch of a new portfolio of Windows-based smartphones with Microsoft, as customers migrate from its soon-to-be abandoned Symbian platform.
Even as Nokia’s new N9 phone receives positive reviews, the company’s chief executive Stephen Elop has made clear that Windows-based phones are Nokia’s future.
The N9, which runs on MeeGo, will likely be dead on arrival.
In light of this, the new price drops seem to be Nokia’s attempt to keep customers interested until they transition away from Symbian to Windows-based phones later this year.
Both Nokia and Microsoft have much at stake with their partnership. Nokia is banking on the Windows Phone 7 OS to help it reclaim its spot as the number-one cell phone manufacturer in the world, while Microsoft hopes its partnership with Nokia will increase its mobile market share.
If the partnership fails, it will likely be a mortal setback to Nokia and too much for Microsoft’s OS to overcome. Nokia has put all its eggs in Microsoft’s basket — if the two stumble, price cuts may not be enough to buy Nokia more time.