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POV: Make no mistake! Nokia’s strategy of volume from low-end and margin from higher-end devices is working!!

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Many times I come across articles from big reputed names like Forbes , WSJ etc regarding Nokia and I feel compelled to write POV articles :P. There is still so much negativity around whatever Nokia does. So, if Nokia is not selling in volume that becomes issue, if they are now selling in volume that also is an issue. Anyways, there is a kind of sentiment which many are trying to build around Lumia 520′ success saying that Nokia is selling it cheap to generate volume and far-fetched conclusions like higher-end not selling well and ASP may take a plunge etc are drawn.

Analysts are again missing the point here.

  • Out of 7.4 million devices sold in Q2, Lumia 520 may have not sold more than 2.8 million units and that is based on our calculation when we predicted 8.4 million overall Lumia shipments. So, Lumia 520 sold around 2.5-2.8 million devices in Q2 out of 7.4 million overall, so in Q3 even if it sells around 3.5 million units rest of the volume will come from costlier devices. And we can safely expect minimum Lumia volume of 8.5-9 million in Q3.
  • In Q3, Lumia 520 shipments will grow for sure but a big part of the volume growth will also come from new device like lumia 625, Lumia 1020, Lumia 925 as these will see wider distribution.
  • Now, coming to pricing strategy, Nokia has priced Lumia 520 such that it is irresistible yet, Nokia is not making loss on Lumia 520 as many are trying to predict. In most of the markets where it is bringing volume from it is still priced around 140-150 USD.
  • More importantly Nokia has priced devices like Lumia 1020 at premium and as much we take pride in covering sales trends of Nokia devices we can safely say that Lumia 1020 is doing better than Lumia 920 now.

So, Nokia is generating volume form Lumia 520 success but not by suffering loss and it is not only one to bring volume for Nokia. With new more expense devices in low-end like Lumia 625 we can certainly see more volume coming with higher ASP.

At higher-end Lumia 920 is doing well in many markets like China. Lumia 925 is also well -priced and seeing good traction in Europe. Lumia 1020 is the device which has the desirability factor going on for it and it is seeing better traction than Lumia 920 in US too. Actually, to us it is a winning strategy of “lower-end driving volumes and higher end driving margins” as Nokia needs both.

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Nayan

Nayan has more than 10 years of experience of covering Technology and innovations. He is a big Nokia fan and Tech disruptions aficionado. He loves to review new cool gadgets and writing about Android, iOS, Gadgets and general Technology stuff. He has been associated with other well-known Tech sites WinCentral and GadgetOx since long.

He currently sports a Lumia 950 XL and Nexus 5X. Other interests include listening to Nu-Metal Hits and Kick-Boxing.
Write to him at Email: [email protected]

http://www.nokiapoweruser.com
  • brendon

    Also if you sell millions of the Cheap Nokia 520 and only making a little bit of profit. you will be getting customers into the WP Eco system, then hoping they have a good experience with WP and Nokia so when they upgrade they will want the flagship device.

    Once people get into an eco system WP & ISO etc they will start to invest into apps which will make it a tougher to leave

    • Kamal Mishra

      But these skeptics don’t agree to even that.

  • Foresighter

    Agree fully 🙂
    Most of the negatives comes from analysts worried about their stock portfolio 😉
    Prediction; 17.8 m Lumias shipped in Q3

  • AA

    If you wrote for WSJ or Forbes, you’d be called an analyst. If you worked for CITi you’d be called analyst. This does not make you one with a clear insight on how the world works.

  • Aman

    Most analyst in US don’t have a clue what Nokia brand means in the rest of the world. Nokia knows what it is doing and increasing sales of WP every quarter. Some of these analyst are the same who did not understand why Nokia went with windows phone OS to begin with.

    So they can say what they want but I am long Nokia.

  • Excellent article. Completely agree with you. These big guys sometimes completely miss the point.

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