Nokia slashes price of Lumia 900 smartphone

Nokia has halved the price of its flagship Lumia 900 smartphone in the US just three months after launch.

The Lumia 900 Windows Phone originally cost $99 (£64) with a two-year contract, but the price has been slashed to $49.99 over the weekend.

A Nokia spokesperson told Techworld that, in a subsidised market like the US, “on-contract” prices do not necessarily reflect the actual cost of the phone, and noted that Samsung's Galaxy S2 was on the market for roughly the same period of time before a $50 price drop was implemented.

“I realise we're under a microscope at the moment and everything we do is under closer scrutiny, but this move is a normal strategy that is put in place during the lifecycle of most phones, and allows a broader consumer base to buy this flagship device at a more accessible price,” he said.

The news comes after Nokia shares hit all all-time low last week, falling below €1.50 for the first time since 1996. Data from comScore and Nielsen suggests that Nokia has sold only 330,000 of its Lumia smartphone in the US since launch, according to Asymco.

Nokia reported a net loss of €929 million (£754 million) in April, compared with a net profit of €344 million a year earlier. The company will announce its Q2 financial results on Thursday, and analysts are predicting another poor set of figures.

The company is already planning to lay off 10,000 workers by the end of 2013 and cut annual operating costs by an additional €1.6 billion, on top of the already achieved annualised run rate saving of approximately €700 million at the end of first quarter 2012.

Meanwhile, Microsoft's Windows Phone operating system – which become the platform of choice for Nokia smartphones last year – is struggling to compete with Google's Android platform and Apple's iOS.

Windows Phone 7 and Windows Mobile together currently comprise 5% of the total mobile phone market, according to market intelligence firm IDC, while Android and iOS represent 61% and 21% respectively. However, IDC expects Windows Phone to gain share, despite a slow start.

“Windows Phone 7/Windows Mobile will be aided by Nokia's strength in key emerging markets,” the organisation said. “IDC expects it to be the number 2 OS with more than 19% share in 2016, assuming Nokia's foothold in emerging markets is maintained.”