The struggling cell phone manufacturer Nokia has recently cut down the prices of its cell phones in Europe, according to two industry sources. This has raised the possibility of a more intense competition in terms of prices in the market for mobile phones. This has come after Nokia’s phones have been steadily losing market share to phones running on Google’s Android platform and Apple’s iPhone and amid reports that the Finnish giant is about to report losses for both the second and the third quarters this year.
One of the sources, who had direct information of Nokia’s pricing policies, said that the highest cuts were on the company’s flagship model, the N8, the C7 and the business oriented E6. These cuts were reported to be around 15%. Both the sources said that the other price cuts were smaller than those on these phones.
One of the sources, who work for a European telecom operator, said that the cuts aren’t very big per model; however the scale of the cuts across the portfolio is something that hasn’t been seen for a long time. At the time of late trade, Shares in Nokia dropped by 1.5% to 4.37 euros. These shares have already fallen by more than 40% this year because of widespread fears that the company’s shift to Microsoft’s Windows Phone platform will not help it compete with the likes of Google’ Android and Apple’s iPhone any better.
A spokesman from Nokia declined to comment on the specific prices of handsets; however he did say that the changes were a part of the company’s normal business proceedings. Nokia has cut prices globally across its portfolio once a quarter in the past as well; however this tactic hasn’t been used by it for many quarters, instead it has marked down product prices model by model.
Analyst Neil Mawston has warned that this latest move by Nokia can start off a price war among the leading manufacturers, which will hit vendors like Motorola. He said that the beneficiaries in such a competition will be customers and operators; however it will push out vendors who have a weak profit margin. It has been forecasted that Samsung Electronics Co Ltd is going to become the world’s largest smartphone maker in this quarter, overtaking Nokia which has been the leader since it launched its Communicator phone in 1996.
