Lumia 920 Sales, Cheap Smartphones Poised to Make Nokia Important Again

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Nokia, the once-great manufacturer of mobile phones, is on the verge of a comeback not because its new Lumia smartphones are better than the competition, but, in part, because they are cheaper.

Nokia Lumia 920The Finland-based handset maker was once the undisputed leader in wireless phones but was left behind by Apple and a number of Android vendors when the smartphone revolution took hold a few years ago. Its young Lumia smartphone series, however, led by the flagship 920, aims to lead a return to prominence for Nokia.

The latest round of devices running Microsoft’s Windows Phone 8 operating system including the Lumia 920, an AT&T exclusive in the U.S. have benefitted from a major marketing blitz and decent buzz surrounding the product. That’s led to better sales than many industry insiders had expected, though still paling in comparison to those of the Apple iPhone, the Samsung Galaxy S III and a handful of other handsets.

So what does the future hold for Nokia? No one knows for sure, but at least one analyst is bullish on the company’s future because it’s selling its phones at a lower price than the competition. Take the Lumia 920, for instance, Nokia’s most high-end device, which debuted at just $99 on contract. While most consumers are more familiar with Apple and Android products, the operating-system capabilities with Windows 8 are at least close to those of iOS and Android. The often unheralded Windows Phone store has grown to more than 150,000 apps in one year, so it’s fair to say Nokia phones can be competitive in this area as well.

Smartphones are starting to outsell feature phones globally, and it’s this saturation of quality products that will have buyers looking more closely at price in the next three to five years, argues Seeking Alpha contributor Ashraf Eassa.

“Nokia doesn’t come from the world of glamorous, high-margin smartphones like the iPhone,” Eassa wrote this week. “It’s used to selling feature phones, and lots of ’em. While feature phones are going to go the way of the dodo, they will be supplanted by fully featured smartphones. In the future … very few will be willing to pay the high prices for smartphones that we see today. The ‘cheap’ smartphones will be so fast, so responsive, and so cheap to make that nearly everyone in the world will eventually have one, and they’ll all be pretty much the same.”

Nokia also recently started selling the Lumia 820, 710 and 610, which are capable devices that cost $49 or less.

“Not only will cheap, but fully featured smartphones help to raise Nokia’s brand awareness, but it will also eventually lead to a run rate in volumes that can reasonably support the company’s smartphone business,” Eassa added.

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