What Should Be Nokia’s Pricing Strategy For Lumia 920?

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Nokia’s recently announced Lumia 920 and Lumia 820 on Windows 8 platform will go on sale in November, 2012. Nokia has started taking pre-orders in Russia for Lumia 920 & 820 for equivalent of US$ 800 & US$ 640, respectively. Nokia’s estimated prices for other countries for above two models are:

  • Sweden : Nokia Lumia 920 $ 860, Lumia 820 US$ 663
  • Germany: Nokia Lumia 920 $836, Lumia 820 $643
  • Italy: Nokia Lumia 920 $772, Lumia 820 $643

From the above pricing, it is evident that Nokia has set the prices of its Lumia 920, which is 10 to 25% higher than the rival Samsung Galaxy S III, risking a consumer backlash that could endanger its attempt to restore its fortunes.

Nokia Lumia 920 features 4.5″ inch PureMotion HD+ display, wireless charging support, 2000 mAH battery, 8.7 MP rear camera, 1 GB RAM, 32 GB of internal storage, 1.2 MP front camera, and Micro-USB port.

Nokia Lumia 820 is a mid-range phone and it will come with 1.5 GHz Qualcomm S4 dual core processor, 4.3″ inch Clearblack display, 8 GB of internal storage, 8 MP rear camera, VGA front camera, NFC and Windows Phone 8 OS.

Windows Phone has just around 3 % of the global smartphone market, while the Android platform controls two-thirds of sales. Apple has around a quarter. Nokia’s Lumia 920 will face stiff competition from Samsung’s Galaxy S III and newly launched Galaxy Note II and of course, Apple’s iPhone 5 will also spoil its party.

“Nokia will find it difficult to command a premium over Samsung’s Galaxy S3 which is the pricing benchmark for a non-Apple flagship smartphone,” said Ben Wood, head of research at British consultancy CCS Insight. Samsung is leader in Android smartphones and have sold 20 million of the Galaxy S III handsets in three months. Apple remains confident of its ability to command a premium, selling its new iPhone 5 well above prices of Nokia and Samsung flagship models.

Nokia’s Lumia 820 will also face tough resistance from Samsung’s Windows 8 Ativ S smartphone, which is also expected to be launched in November. Samsung is very sensitive about prices and will definitely fix prices of its Ativ S less than Lumia 820.

Now, the question arises what should be right strategy for Nokia to attract customers to buy its new flagship smartphone 920. Since the buyers have not given thumbs up so far to Windows phones, which is reflected in its negligible market share, Nokia can’t afford to set the prices higher than existing Android devices especially of Galaxy series of Samsung. If Nokia really wants to increase its market share and get advantage of ensuing holiday season then they should play with prices and create flutter in the market by keeping its prices approx 20 to 25% lower than Samsung’s Galaxy series. Only this bold decision of Nokia will compell the buyers to lay their hands on new Nokia devices and this initiative could prove to be game changer for them.

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