Nokia crushed by Android assault - promises deep smartphone price cuts

Finnish phone maker's revenue falls 29% | Promises "deep price cuts" for its new Lumia smartphones, created in a multi-billion partnership with Microsoft.

Nokia's boss is promising "deep price cuts" for the companies flagship line of Lumia smartphones, created in a multi-billion dollar new partnership with Microsoft.

The pledge came from CEO Stephen Elop after the Finnish phone giant reported a 29% fall in March quarter revenue to €7.35 billion, its lowest since 2004.

The company slipped to a €1.34 billion loss from a €439m profit a year ago.

The result included €772m in one-off charges related to the struggling Nokia-Siemens joint venture, which makes gear for telecommunications networks (including Vodafone NZ).

Cellphone shipments fell 22% to 83 million.

In the smartphone segment, Nokia said it had sold 2 million Lumias since the new handset's October launch.

The Lumia runs on Windows Phone software developed by Microsoft.

By comparison Apple sold 37 million iPhones during its December quarter.

However, it is not Apple but Google's market-leading Android software that is causing Nokia the biggest headache.

But Mr Elop focused on mid- and low-price Android-based phones (made by Samsung, Sony, Motorola, HTC, Huawei, LG and others).

Collectively, Android handsets now account for around 50% of the smartphone market, with Apple around 30% in most surveys, and the once-dominant Nokia and RIM (maker of the BlackBerry) in single figures.

Deep price cuts promised
"The price point of Android devices from a variety of manufacturers is quickly being pushed down," Mr Elop told media and analysts during a conference call.

"A very clear part of our strategy is to drive the prices of our Lumia devices deeply down, so we can compete effectively,"

The Nokia boss, who came to the company from Microsoft, rated the US launch a success; the UK launch "challenging".

The Lumia series was launched in NZ in March, with 800 selling for $899 through Telecom, Vodafone and 2degrees and the cheaper 710 model for $549 through Telecom only.

Compared to their frenetic efforts to push Apple and Android handsets, the three local carriers have taken a low-key approach to the new Nokia series - which most critics, including NBR, rate as excellent in terms of design and usability, if still trailling Apple and Android in terms of apps and (for New Zealanders, especially) downloadable content.

Now, given Mr Elop's deep discouting pledge,  Telecom, Vodafone and 2degrees might have trouble moving their Lumia stock - at least at its current pricing.

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