Nokia announced over the weekend that it was cutting the price of its flagship device, the Lumia 900, a move that came in the wake of Microsoft’s announced that Windows Phone 8 will not run on legacy devices. The Lumia 900 debuted with a retail price of US$99 with a two year contract, but can now be had for $49.99.
This is being seen as a desperate move by Nokia, which saw its once dominant position in the cell phone industry succumb to the one-two punch of Google’s Android and Apple’s iPhone. Nokia abandoned its proprietary Symbian OS in 2010 after sales fell off a cliff, but unlike every other major player in the industry the company embraced Windows Phone 7.x instead of Android.
The Lumia 900 was the flagship device to launch that transition to Windows Phone, and it was heralded for its unique design and stylish form factor. When it was introduced at $99, the price was considered aggressive, a necessary step to get people to buy into the otherwise unsuccessful Windows Phone platform. At $49.99, it carries a new message: Please buy me!
The problem is that Microsoft effectively obsoleted the device just a few months after it was released. By announcing that legacy devices wouldn’t be able to run Windows Phone 8, which is expected to be released towards the end of 2008, the company let customers know that an investment in the Lumia 900 was an investment towards keeping your feet rooted in last year’s Windows Phone platform.
There are many Android devices that are also stuck on whatever version of the OS that they came with, but the difference is that the Android platform is well-established. Windows Phone is all but irrelevant in today’s market, and that makes the Lumia 900 a hard sell.
“The announcement of Windows Phone 8 was a kick in the teeth for Nokia and its high end Lumia handsets which forces it to be more aggressive with the pricing of these devices from now on,” Canalys analyst Pete Cunningham told Reuters.
We should note that Gartner and IDC both predicted that Windows Phone would surpass Apple’s iPhone by 2015 in 2011.
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