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

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.
Written by Jo Best, Contributor

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.

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