As per +The Wall Street Journal report, +Nokia is cutting price of its flagship Lumia 900 Windows phone three months after launch from $99 to $49. Nokia was already squeezed on margin with original 2-yrs contract pricing, not sure what their strategy is by reducing it further by half.
As per some teardown analysis by IHS iSuppli market research firm, Lumia 900 carries a bill of materials (BOM) and manufacturing cost (MC) of $217. That is $233 in profit margin at $450 retail without contract. Lumia 900's closest competitor with similar feature set is +Samsung USA’s S II Skyrocket +Android phone, which carries BOM + MC of $244, and a retail price that is $100 higher, at $550.
Comparing Lumia 900, the challenger, to Apple's iPhone 4S, the reigning champion of supply chain and cost management, is a whole different ball game. As per some teardown analysis estimates, iPhone 4S carries BOM + MC of $198 and retails at $649 without contract. That is a whopping $451 margin per unit and $1 more than Lumia 900's retail price!
And then there is economies of scale at work. Apple commands the purchasing power to drive costs down using economies of scale. It is a vicious circle for Nokia and other Apple challengers between economies of scale and purchase power.
Sources:
Nokia Lumia 900 Carries Bill of Materials of $209
Nokia Halves Price of Flagship Phone: Finnish Company Says Move on Windows-Based Smartphone Is 'Normal Strategy'
Video - Inside Nokia's Struggle Against the iPhone - WSJ.com
Nokia's top-of-the-range Lumia 900 costs $200 less than the cheapest iPhone 4S. But Nokia pays more for the parts. Ben Rooney in London explains how big a problem this is for Nokia. Photo: Reuters
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As per some teardown analysis by IHS iSuppli market research firm, Lumia 900 carries a bill of materials (BOM) and manufacturing cost (MC) of $217. That is $233 in profit margin at $450 retail without contract. Lumia 900's closest competitor with similar feature set is +Samsung USA’s S II Skyrocket +Android phone, which carries BOM + MC of $244, and a retail price that is $100 higher, at $550.
Comparing Lumia 900, the challenger, to Apple's iPhone 4S, the reigning champion of supply chain and cost management, is a whole different ball game. As per some teardown analysis estimates, iPhone 4S carries BOM + MC of $198 and retails at $649 without contract. That is a whopping $451 margin per unit and $1 more than Lumia 900's retail price!
And then there is economies of scale at work. Apple commands the purchasing power to drive costs down using economies of scale. It is a vicious circle for Nokia and other Apple challengers between economies of scale and purchase power.
Sources:
Nokia Lumia 900 Carries Bill of Materials of $209
Nokia Halves Price of Flagship Phone: Finnish Company Says Move on Windows-Based Smartphone Is 'Normal Strategy'
Video - Inside Nokia's Struggle Against the iPhone - WSJ.com
Nokia's top-of-the-range Lumia 900 costs $200 less than the cheapest iPhone 4S. But Nokia pays more for the parts. Ben Rooney in London explains how big a problem this is for Nokia. Photo: Reuters
0 0 Powered by socialditto As per a Wall Street Journal report, Nokia is cutting price of its flagship Lumia 900 Windows phone three months after launch from $99 to $49. Nokia was already squeezed on margin with original 2-yrs contract pricing, not sure what their strategy is by reducing it further by half.
As per some teardown analysis by IHS iSuppli market research firm, Lumia 900 carries a bill of materials (BOM) and manufacturing cost (MC) of $217. That is $233 in profit margin at $450 retail without contract. Lumia 900's closest competitor with similar feature set is Samsung’s S II Skyrocket Android phone, which carries BOM + MC of $244, and a retail price that is $100 higher, at $550.
Comparing Lumia 900, the challenger, to Apple's iPhone 4S, the reigning champion of supply chain and cost management, is a whole different ball game. As per some teardown analysis estimates, iPhone 4S carries BOM + MC of $198 and retails at $649 without contract. That is a whopping $451 margin per unit and $1 more than Lumia 900's retail price!
And then there is economies of scale at work. Apple commands the purchasing power to drive costs down using economies of scale. It is a vicious circle for Nokia and other Apple challengers between economies of scale and purchase power.
Sources:
Nokia Lumia 900 Carries Bill of Materials of $209
Nokia Halves Price of Flagship Phone: Finnish Company Says Move on Windows-Based Smartphone Is 'Normal Strategy'
Inside Nokia's Struggle Against the iPhone - WSJ.com
Nokia's top-of-the-range Lumia 900 costs $200 less than the cheapest iPhone 4S. But Nokia pays more for the parts. Ben Rooney in London explains how big a problem this is for Nokia. Photo: ReutersPowered by socialditto
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As per some teardown analysis by IHS iSuppli market research firm, Lumia 900 carries a bill of materials (BOM) and manufacturing cost (MC) of $217. That is $233 in profit margin at $450 retail without contract. Lumia 900's closest competitor with similar feature set is Samsung’s S II Skyrocket Android phone, which carries BOM + MC of $244, and a retail price that is $100 higher, at $550.
Comparing Lumia 900, the challenger, to Apple's iPhone 4S, the reigning champion of supply chain and cost management, is a whole different ball game. As per some teardown analysis estimates, iPhone 4S carries BOM + MC of $198 and retails at $649 without contract. That is a whopping $451 margin per unit and $1 more than Lumia 900's retail price!
And then there is economies of scale at work. Apple commands the purchasing power to drive costs down using economies of scale. It is a vicious circle for Nokia and other Apple challengers between economies of scale and purchase power.
Sources:
Nokia Lumia 900 Carries Bill of Materials of $209
Nokia Halves Price of Flagship Phone: Finnish Company Says Move on Windows-Based Smartphone Is 'Normal Strategy'
Inside Nokia's Struggle Against the iPhone - WSJ.comNokia's top-of-the-range Lumia 900 costs $200 less than the cheapest iPhone 4S. But Nokia pays more for the parts. Ben Rooney in London explains how big a problem this is for Nokia. Photo: Reuters
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