Recent reports are claiming that Nokia has begun to make some price cuts on
selected music and media phones, in some cases up to 10-percent. In addition to
the selected music and media models, Nokia has also made some smaller price cuts
across the rest of their models. The Nokia 5310 and 5610 music phones as well as
the 8GB N81 saw the largest cuts.
These price cuts come as a response to increased competition in the mobile
phone market, however Nokia still holds a solid 40 percent overall, and this
news will just make it a little tougher on some of their competition.
Ben Wood, research director at CCS Insight stated that “Nokia has always been
extremely tactical with its pricing, pinpointing sweet spots in different
segments of the market and making adjustments to wrongfoot competitors.” This
means that things may just get a little tougher for rivals such as Sony
Ericsson, who already made almost no money during the April-June quarter and
actually cut 2,000 jobs in response.
Cheuvreux analyst David Hallden referred to this move as a ‘Crazy Ivan’ and
feels that this was just “a way to run away from competition.”
In addition to the cuts from Nokia we have even seen some carriers slash
pricing on Nokia handsets. Rogers Wireless recently cut the price of the 8GB N95
in half in an effort to make it more attractive as compared to the newly release
iPhone 3G.
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