Nokia Windows Phone: A Pricing Advantage?

Sitting in the auditorium witnessing the Nokia World keynote live, my first thought on the two new Windows Phone devices was how aggressively they were priced: €420 for the high-end Lumia 800 and €270 for the 'affordable' Lumia 710. It may have been because the technical specifications had been leaked so comprehensively, but I considered this would be the real post-event talking point. [caption id="attachment_1269" align="aligncenter" width="522" caption="Pricing for Nokia's Windows Phone line-up was announced today in the opening keynote at Nokia World"]Nokia Windows Phone pricing[/caption]

For individual purchasers in the UK, this pricing translates into 'free on a £31 per month 24 month tariff' with Vodafone [1. Three and Orange have also confirmed they will range the device on similar tariffs.]...  and - crucially - (per month) this makes it:

  • £15 cheaper than an iPhone 4S
  • £8 cheaper than a Blackberry 9900
  • £5 cheaper than a Samsung Galaxy S2

Charles Arthur at the Guardian points out that across all operators this pricing makes it £160 cheaper over the life of contact than the cheapest option for the iPhone 4S.

In my view - irrespective of how well-known or not the Windows Platform is or how successful Nokia's market campaign is (and they have a huge spend planned in partnership with operators) - it will be the price that attracts shoppers' attention first and then build quality (or specifications) that will keep them there.

In fact, my only source of disappointment is that the Lumia 710 won't be available immediately. At around £280 (including UK sales tax) this puts it firmly in the mid-market and looks cheaper than the comparable HTC Radar Windows Phone device whilst offering a faster processor and better build (especially the ClearBlack TFT display). I'd expect consumers to embrace it and - at this price point - it could comfortably become the standard-issue for enterprises wanting the Office and SharePoint features... pricier than a mid-tier BlackBerry, but a difference quickly recouped without the cost of a BlackBerry servers / licensing.

Therefore I was bemused to read Bernstein analyst Pierre Ferragu's opinion that the devices were "Worryingly Uncompetitive". He says:

I don’t think Nokia can regain anything in the $580 price band, in which Android and iOS probably have over 95% market share. This phone [is] condemned to be either anecdotic or go through massive price cuts in the next 6 months.

The Lumia 710 (that we experienced today as well) clearly comes across as “cheap build” … in its bulky plastic form. At $375, the phone doesn’t appear fit to compete against Android phones … and is much closer to $100-$150 phones from Huawei and ZTE that are ramping up.

I can see absolutely no comparison with the $100 devices that Huawei is producing (as impressive as they are) - the ones I've seen are plastic, have dire cameras and much poorer screens. And since when was 12.5mm depth "bulky"?

Am I over-estimating the value of Nokia's offering or has this analyst not actually seen these devices?