HELSINKI
(Reuters) - Nokia (NOK1V.HE)
cut phone prices across its portfolio in late January, putting its
cheapest smartphones on a collision course with mid-range phones from
rivals Samsung (005930.KS)
and Sony Ericsson.
Several industry sources told Reuters Nokia had cut prices by up to
10 percent.
After the price cut Nokia's cheapest smartphone model, the 5230,
retails for around 170 euros ($239) in Finland. The model's wholesale
price is now below 120 euros.
Demand for cheaper smartphones has helped the segment grow despite
the recession, defying the broader, weaker industry trend. Sales jumped
30 percent in the October-December quarter according to research firm
Strategy Analytics.
Nokia said last week that revenue from smartphones jumped 26 percent
in the quarter from the previous quarter to 3.9 billion euros, helping
power its overall result. The average wholesale price of its smartphones
dipped to 186 euros from 190 euros in the third quarter.
The falling prices have hurt handset vendors like Sony Ericsson (6758.T)(ERICb.ST),
who have focused on mid-range or feature phones, which often boast good
cameras or music players but lack computer-like open operating systems.
These have been cheaper than smartphones, but the price difference is
declining fast.
"This latest round of price adjustments sees Nokia taking its
low-cost Symbian devices into new territory," said Ben Wood, research
director at CCS Insight, a British firm that tracks the wholesale prices
of mobile phones in Europe.
Nokia's price cuts come as the industry returns to growth following a
grim 2009 marked by recession-hit consumer demand. Nokia says it
expects the cellphone market to grow 10 percent this year.
($1=.7122 Euro)
Nokia said price changes were part of its normal, ongoing business.
The world's top cellphone maker usually cuts prices across its portfolio
a few times each year.