Nokia Cuts Phone Prices to Increase Market Share

Espoo, Finland-based mobile phone maker Nokia has reportedly cut the price tag of some of its handsets in an attempt to lure more consumers into buying its products. The company is said to have performed a price cut for a series of its devices in late January, and that its cheapest smartphones are now sporting about the same price tag as mid-range phones coming from its closest rival, Samsung.

According to a recent article on Reuters, Nokia explained the price cuts as a normal move when it comes to its ongoing business. Some of you might already know that Nokia does lower price tags across its portfolio yearly. However, the news site reports that the new prices for Nokia's smartphones are now around 10 percent lower than previously, according to industry sources. One of the cheapest Nokia models on the market is the Nokia 5230, which is now sporting a price tag of 170 euros ($239) in Finland, while its wholesale price has dropped under 120 euros.

Last week, Nokia reported its financial results for the fourth quarter of the last year, and posted revenues from smartphones increased by around 26 percent when compared to the previous quarter. However, Reuters notes that the average wholesale price for smartphones went down to 186 euros in Q4 2009, when compared to the 190 euros in the previous quarter of the past year.

However, the entire smartphone market has registered a boost in the fourth quarter of the last year, at least this is what a recently published report from Strategy Analytics has indicated. With a 30 percent increase in shipments, the smartphone segment has shown that the recession didn't affect sales as much as it affected the entire mobile phone market.

However, the rise of smartphones affected the sales of non-smartphone devices, and it seems that vendors with a portfolio based mainly on mid-range or feature phones are those who took the hit. And with the price differences between these devices (which lack an operating system) and smartphones declining fast, their sales might decline even more.