Nokia won't ditch US, will make Windows Phone cheaper, promises CEO Elop

Nokia won't ditch US, will make Windows Phone cheaper, promises CEO Elop

Summary: As the company reiterates it has no plans to pull out of North America, its chief executive reveals more budget devices are on the way.

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With Nokia's latest set of financial results showing another flat performance in the US, chief executive Stephen Elop said the company has no plans to pull out of the region.

In its second quarter results released on Thursday, Nokia's North American device shipments came in at around half a million – slightly down on the previous quarter's 600,000. It's a figure sales in the territory have been hovering around for a number of quarters, meaning it accounts for less than one percent of its global device shipments.

It's figures like these that prompted analysts on today's earnings call to ask Elop if the company shouldn't consider pulling out of the area altogether.

The CEO maintains that the US is worth the effort.

"With respect to North America, particularly the US market, we believe quite strongly the signalling value of that market is high," he told the call.

"We measure this quite carefully by studying the influencers on purchases around the world and the extent to which, for example, a powerful launch of the Lumia 1020 in the United States is reflected around the world and how that gets picked up and everything from press coverage to blogger coverage to the encouragement of developers to build apps for Windows phone and so on and so forth, and there's an amazing amount of influence coming out of the US market.

"Now it is a hard market... it is a big investment. We have to do better. We have to break through so we know there's a lot of hard work ahead but we remain committed to the Americas."

Elop said he had seen improvements in the US, particularly in sales of the 928 and the 520, one of the more budget-friendly Lumias. It's not the only market where the 520 has found favour: China, France, India, Thailand, the UK, and Vietnam are all picking up the device, according to Nokia.

Despite taking the Lumia range to lower prices, the company is aware of mounting price pressure from competitors.

"We do have to think carefully about the pricing strategies because, as much as we have some good support for strong pricing, for example, with the Lumia 1020 where it's so differentiated we don't sense pricing pressure or anything around that in the earlier periods, at the same time certain of our competitors — I'll just use as an example I saw in the newspaper in the United Kingdom just a couple days ago where they throw in a Galaxy phone, a Galaxy tablet, free smartphone and who knows what else they had in inventory, bundle it all together, and put it out there for £21 per month," Elop said.

"And so we are sensitive to the fact that there are pricing pressures and we're going to have to manage that very, very carefully."

With that in mind, it looks like Windows Phones could be about to get even cheaper.

"Clearly, our principal smartphone strategy continues to be focus on Windows phone and, in the lower end bands, you see us continuing to innovate to support the opportunities that exist in those price points particularly those price points that are below the reach of Windows phone so far," Elop said, adding the company will "push the price point of cap Windows Phone devices further down".

The cheapest Nokia so far is the 520, which Nokia itself prices at €139 ($180), around $80 more than Nokia's flagship featurephone, the $99 Asha 501.

Topics: Nokia, Hardware, Mobility, Smartphones, Windows Phone

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14 comments
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  • As the Pennsylvania Railroad man said:

    "We lose money on every shipment, but we make it up in volume."
    Tony Burzio
  • "particularly those price points that are ...

    ... below the reach of Windows phone so far."

    Yeah, that's one theory on why they're not selling.
    daboochmeister
    • I agree. Since a vast portion of Android sales

      are the cheap to free phones, you're right that the higher price point is a hinderence to fast adoption.
      William Farrel
      • Any Phone w/ Android is a Smarter Phone than iOS or WP7.5!

        Yeah that harkens back to Ken Kutaragi's statement of fact, being Xbox 360 was Xbox 1.5 and both competitors are dumbed down feature phone OS's that can't run half the features of Android. And my dear fellow is why over half the Smartphones sold in the last two quarters were Androids. Not just any old cheap Android phone either. Samsung alone has sold over half of theirs being Galaxy Series devices. Which are not cheap no matter what model you get!

        Let me know when WP8 or iOS can do true real time multitasking and not just suspending tasks to the background. We'll know when any of the competition can actually run concurrent Apps on the same screen! .....like Samsung's Galaxy S series are all capable of. In fact let's see a iOS or WP7.5 (cuz there is no true WP8 device out) run multiple OS's like Samsung can with Windows 8 and Android in it's own window or dual booting both.

        Then you can also let me know when either of these cheap totally out sourced fake manufacturers (M$ & Apple) can design, parts, products, ship (in own built ships), distribute, market with their own marketing firms Cheil (top 10 Global Award Winning Marketing Firm) and are the only end to end Smartphone manufacturer as just one division in their Multinational #1 Global Electronics Conglomerate on the Planet!

        Also..... stand back buddy, while with Samsung's help Android is about to top 1 Billion Activations Globally and 250 Million of those have been activated in the less than 6 months. Meaning compared to Apple's total including over half cheap or free iPhones still in active use (look it up) Android beats their total by well over double. Considering I'm only including those activated over less than a year!!! ;-P
        KronJohn
        • So smart that Dumbroid has no December on their calender

          Yeah. Yeah. Yeah. Did you guys notice that 4+4 cores that Samsung has to use to power their S4? Could someone explain why WP8 could run faster on a so-so 2-core processor while Dumbroid barely matches on 4+4 cores? Smarter, my rear.
          LBiege
          • Re: why WP8 could run faster

            Because it doesn't. The latest version of Android will still run happily on a single core, Windows Phone will not.
            ldo17
          • Good to know!

            Because where I come from, ALL Androids on single-core are crappy and laggy!
            petin_y@...
  • I don't see windows phone itself a big advantage

    outside of some sort of superficial visual or UI operational preference for some people. The other phones have so many more real advantages. Windows also costs something. What MS should do is either:

    A. buy nokia or go exclusive and then be more like apple where the OS can be more deeply optimized and integrated for a single phone, so it can run better on cheaper hardware. Although I'm not sure how much you save if you just need less RAM and a lesser CPU than an equivalent android. That could potentially make up on the difference in SW/HW costs?

    B. Go android to save on licensing and just make the best phones you can, a-la HTC One. Windows OS itself is not going to sell the phones any better than android, other than to the handful of fanboyz. They can even throw in a windows-like tiled launcher layer.
    drwong
    • superficial visual or UI operational preference????

      You have no idea, once you sign in all your accounts it's like a sweat dream and android/iPhones are a bad nightmare of bashing endless apps to do anything. You will never to back. You can't test one truly without signing in so you can use the hubs.
      everss02
      • sweet dream

        lol
        everss02
  • Controlling the retail experience

    I think MS needs to quickly implement and expand its stores in stores effort, to sell Windows 8 and Windows Phone 8 products. Also, I believe MS and Nokia need to try and get at least 1 salesperson in each carrier store, and other retail outlets, dedicated to moving WP8 handsets, and only WP8 handsets. I believe there is still a bias in retail stores towards Android and iOS (not as blatant or as bad as before), and MS and its partners need to secure salespeople in stores, dedicated to moving Windows products.
    P. Douglas
  • Clearly a smash hit

    CEOs always make comments like that when things are doing well.
    John L. Ries
  • Waiting for Lumia 320 and 420

    A $49 Lumia 320 and a $99 Lumia 420 will just kill the iPhone and Galaxy brand pricing in America and Europe. This will also increase the developing economy marketshare for Lumia phones.

    Smartphones are the new featurephones and the faster that Nokia or any other company adjusts their cost structure, the faster their marketshare will grow and ultimately market presence will last.
    calahan
  • JO You are the Best

    Get Rid of Donald Trumps Ugly face from "You May Also Like"
    sightsandsounds