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Nokia Lumia 520
181

Nokia well positioned for approaching smartphone price wars as costs plummet

In tech media, it’s always the big, whizz-bang devices that tend to garner the most attention from enthusiasts. After all, they tend to have a disposable income and they are at the forefront of mobile technology. They're also the loudest for complaints or praise, dominating the conversation.

The Nokia Lumia 1020 is a perfect example, coming in at nearly $700 without a subsidy and $299 with—most people can’t afford it, but it reaps the headlines. And people still want it to have better, more expensive specs. Meanwhile, mid to low range devices are met with derision and scorn as people who are in well financed, established markets chime in on a device not aimed at them. We even see it here on this site, where people just want quad-cores, 1080P displays and envelope-pushing gizmos, yet they lament devices like the Lumia 625.

But the reality of the market is that smartphone prices are dropping favoring devices like the Lumia 52x and Lumia 62x or Huawei with their Ascend W1 and W2. According to the IDC, the average smartphone price has plummeted from $450 to just $375 in the last year. That trend is expected to continue with the average price headed to $350 and lower in 2013 and that directly cuts into the profit margins of Apple and Samsung, who often bet on high-end smartphones like the iPhone 5 or Galaxy S4 (neither of which are cheap).

Michael Morgan, an analyst at ABI research, was quoted by Bloomberg saying

“The days of great growth in the high end of the market are gone…It’s the Chinese companies who know how to survive on tiny margins that are ready for the fight that’s about to ensue.”

In response to this, Apple is expected to release a lower-priced iPhone later this year in addition to their high end version. The problem here though is Apple is reacting to the market instead of anticipating, losing valuable time and ceding ground to other manufacturers. There’s no doubt that companies like Huawei and Lenovo are starting to take a bit out of the smartphone business, but Apple so far has not had a response.

Likewise, HTC has been doing the opposite: trying to be a high-end premium manufacturer akin to Samsung and Apple, chasing the more lucrative “flagship” status with their One. While that device has received very positive press coverage and reviews, consumers are still choosing Samsung over HTC when Android is the option. The problem here, as noted by BGR, is HTC does not have much in response for the low-end market anymore, as they sunk a lot of resources to get behind the One, consolidating their offerings (even the Mini is still not low enough). With Samsung and Nokia positioned against them, HTC is now caught in a dangerous situation.

Nokia and The Next Billion

Speaking of Nokia, the company has been very forthright about reaching “the next billion”, referring to emerging markets who are graduating from simple feature phones to full smartphones. This is why Nokia keeps hammering at devices like the Lumia 520, Lumia 521, Lumia 620 and tomorrow’s Lumia 625—it offers them an area where they can legitimately compete without Apple breathing down their necks.

Just today, AT&T announced the Lumia 520 for a no-contract pre-paid price of $99. That’s $99 for a brand new smartphone, flat in the US. Likewise, MetroPCS was also shown to be getting T-Mobile’s Lumia 521, presumably at a similar price point. While these devices don’t get a lot of admiration, they are the next big thing driving the industry (plus, we actually really like these phones).

The good news here though is Nokia is not reacting to the market, but rather expecting it. That means devices like the Lumia 52x can flourish at the low end for a few months, giving some respite before Apple drops their $300 device in the fall. And if Bloomberg is right, we could see the industry start to cannibalize itself, akin to what happened to the PC market years ago when costs plummeted and there was (and still is) a race towards the bottom.

So, dear reader, next time Nokia or Huawei announce “another” low cost, premium Windows Phone, don’t roll your eyes but rather rejoice at the forward thinking of these companies. Chasing the high-end smartphone market, while necessary to a certain extent, should not and cannot be their only focus. Continue to enjoy the Lumia 920, Lumia 1020 and whatever unicorn phone comes out in the future, but remember, it’s the Lumia 520 and Huawei Ascend W1 that are driving this industry now.

via Bloomberg and BGR

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Reader comments

Nokia well positioned for approaching smartphone price wars as costs plummet

181 Comments

It really makes sense because 50% of people who have mobile phones have smartphones already.. That means that the other 50%, not saying definitely all, most likely don't have them because of finances.. So, the last 50% are the target market, and phones need to be made affordable for them.. Hence lower end devices.. And, this does not only apply to emerging markets.

If you're talking about the next generation, third generation, of devices then it would actually be the 30.. LOL.. Like the upcoming L930, L938, L935, L1030, L530, L531, and your super low end NL30... LOL❕

no, 40 would be more likely as the previous was 00. So they jumped 20.
Lumia 900, 800
Lumia 920, 820,
Lumia 940, 840

I hope MS is working on a WP version for Asha models.. Very soon feature phones, as they currently are, aren't going to exist.. I see there being only dumb, and smart, phones in the near future..

No, WFP... Windows Feature Phone❕... Lol!!!... Stripped version of WP, same start screen, same market share.

Interesting topic. Feature/smartphone is a grey area when it comes to Asha. Analysts such as IDC consider them in the 'smartphone' sales bracket.

The majority of people IV seen have the low end android and when they see my 920 they want one so these low end phones are gonna be awsome for people out ther wanting to kick that slow android to the curb lol

Good point❕... I haven't seen one person who is satisfied with their low end Android device.. Nokia is going to have the entry level market sowed up❕... Yeah, we shouldn't call WP devices "low end"... They are entry level devices.. I'll try to remember that.

Excellent article Daniel, it needed to be said, especially to some of our WPcentral readers. There is a big market out there for budget users. Im glad the 625 is coming out and think this bodes well for the future.. Nokias product range is broadening out nicely.

Agreed!
 
Nokia + WP is a kill combo.  Uber hardware innovation (even their "low end" cameras are pretty good), great Nokia apps, combined with the efficiency and butter-smooth OS.  The fact that WP can run so smooth and stutter-free even on the Lumia 520/521, is a great thing.  When people pick up a 521 and look at what they are getting for the price, it's pretty amazing.  This is a huge differentiator when you look at the Android offerings at this price point... stuck running an ancient version of Android, and just laggy all over.
 
I'm game for any way to grow the WP marketshare.  This could play out to be a great year for the platform.  Haiwai, HTC, Samsung... all are welcome in my book.

High end smartphones are like high end luxury cars (think S class). They are great, have best tech and everybody lusts over them, but automakers don't care about these cars as much as they care about their mid and low end luxury cars (think VW Jetta) because those low end cars are the most important ones since they bring in all the cash.

I don't care, I still want an S Class and I will still buy an S Class. This is despite knowing that the Jetta is important to others.

I don't think cars are the best example in this case because of so many variables, but still a valid point

I think a better analogy is that most people drool over a fillet mignon, but most of those people could only afford to buy a cheaper beef instead. ;)

I agree. The high-end models should continue to be there to show-case the full capabilities of the WP OS. But what will provide the engine for WP to move forward and gain marketshare and user-base will be the very capable handsets like the Lumia 520 and 625. What's good about WP is it still performs premium even on low-spec phones.

That's the case in countries where you have to buy the phone outright but that comparison falls apart in a subsidy based market like the U.S. where consumers can either a) buy it outright and pay $70/month or b) subsidize it and pay $70/month. It just makes no difference to pick a Lumia 820 over a 920 when going over to AT&T (not sure if they stock the 820 but whatever). That $50 upfront you'll save is nothing compared to what you'll spend over the course of the contract.

Good on Nokia to go into the lower end market but beyond the prepaid consumers and those on budget carriers, this won't really make them any better off in North America. It is definitely amazing for Europe/Asia/Africa/Latin America though. That logic works there - budget makes people comprise a little and Nokia has the best compromises available.

You forget companies like T-Mobile, metropcs, straight talk, virgin mobile, etc. Not everyone wants to be tied to a contract, and the 15% of contract free phones proves it

Along with Clavitox's statement, companies can't even get close to just depending on America either, since the rest of the world is also a huge part of their customer base. Perhaps this: if we want to continue to enjoy high end phones, we have to whole heartedly support Nokia selling budget phones -- especially because their marketshare in America is hurting compared to other places in the world.

Although I'm not one to put down lower spec-ed phones in print, I am guilty of thinking that way. Thanks for opening my eyes a bit, Dan.

The problem is that if other sites stops ignoring the spec war, they still won't recommend WP 8. The OS is missing so many essential apps/games and features that it is hard to recommend it for them.

If guess I should have said it's missing all the apps that get 15 minutes of fame. Also, we always get apps once they are no longer popular. Remember how everyone cried about Draw Something? Words with friends? Now everyone plays candy crush. Do we have it?

Actually i believe, you need to look at the bigger picture and stop complaining about those apps which are not available in the market and i am saying this because i am using Nokia Lumia 800 since last 8 months and believe me Windows marketplace never let me down because i always find something new and different to try on my phone and pass my time 
I know games like Subway surfer,TR 2 are great to have but that doesn't really mean you have to crave for them because while using windows phone you need to sacrifice your urge to play popular games for the sake of an overall extraordinary user experience without any kind of lags or bugs etc.
And don't worry Windows phone is still in its development stage and in six months or so i hope frequency of complaints about lack will be getting lower :)

This is 2013. WP shouldn't be in its development stage anymore. For some reason Microsoft thinks Nokia has money to burn like it does. iOS and android were released in 2007/8 so development time came and went.

You people took me wrong because by the term developement stage i mean to say is, its now that people have started taking windows phone OS seriously and you have to believe me only when people show interest in an operating system that developers also get intersted so from a developers point of view windows phone OS is still developing and by next six months or so you will find it significantly improved...till then please wait :)

The problem is not the missing games, the problem is the lack of simple features of OS such as rotation lock and dedicated volume setting for different functions of the phone When the hell are we going to get that? 2015? The OS is no longer in development stage. It was fine to call the OS as still in development stage when it was WP 7 or 7.5, not WP 8. Lets stop playing the "development stage, maybe in 6 months" card. If we keep on doing that, Microsoft will be even slower. It's time for them to realize that they are digging their own grave with such incredibly slow development of WP8. Lumia 1020 is a clear indication on what the hell is wrong with Microsoft's WP team. Why is is that Nokia can push the envelope and they can't?

+1,

Additionally there are a lot of missing APIs which are just annoying and which avoid a good app experience, found on other platforms, e.g.: 

- Share to app (eg WhatsApp) "contract" (allow apps to register for ShareLinkTask and other content)
- Video picker API
- Share video to app (like share picture)
 
 

I agree about the volume contro. The first time I plugged headphones into the jack of my Lumia 521, I thought I would lose my hearing. I keep the volume set at the highest setting so that I can hear alerts, ringtones...etc. when outdoors or in a public indoor area. I would think that the volume should automatically be reduced to 3 or 4 when phones are plugged in, and return to the prior setting when they are unplugged.Don't miss Rotation locak because I don't rotate the phone that much to begin with.

It's funny that since the Lumia 925 and 1020 were announced I have noticed a few more reviews of WP apps on cnet. I'm not sure if this is a coincidence, but the lame stream (tech) media seem to really like (or at least be intrigued by) those two phones. Cnet even had an article listing the top 3rd party alternative apps to "official" WP apps that were missing. It's almost refreshing :)

Trust me. They will never recommend it. Never. Why? because those people are assholes. The OS has more features that others can never dream of. Regardless, in time WP will be number 1 OS. those assholes are still assholes.

Dude stop living in crazy land. WP will never be number 1. It's like saying Linux will overtake windows. It simply won't happen. Now if Microsoft moves quick and gets their shit together, they might overtake iOS in the US within 5 years.

Actually, I would say that WP isn't going to take over Android and time soon, but it is most definitely possible that it could someday.. And, it's also possible that WP could outsell iOS in less than five years... That's kind of the point of the article.. People are going to be surprised by the amount of market share these entry level phones are going to bring to WP in the next few years,, here in America❕... Especially if other OEM's see Nokias success with ELWP's, and they join in with their own EL devices.. Microkia is brewing something up, and like my momma's gumbo it's got to simmer slowly for it to hit the spot❕... Tha G-spot... And, once WP hits that G-spot the markets going to cum all over iDroid... I always have said one thing about iDroid,, once they peak they are going to shrivel up, and fall asleep. And, once they fall asleep big daddy's gonna sneak in and get hizzzzz... Oh-yeah-baby❕
.... In other words,, iDroid has been just fuc#$%& tha market.. Windowsphone is gonna make love to it.......

Avoid sites like CNET, ZDNET and the likes, they are simply anti-Microsoft. They have a lot of sponsored articles and they write for the number clicks. I saw the torture-testing for Nokia & d Surface RT and I just switched off from d site completely. If you want balanced reviews always visit WP Central or try PocketNow.
One thing is sure, Windows Phone is having increased Mind Share and then the market share will follow. Its only a matter of time.

You're seriously comparing WP to Linux? WP has Microsoft's huge resources backing it, there is absolutely no reason why they can't push WP to the top eventually.

Very insightful article, lol unicorn... Finally you paid out on the trolls who carry on about 1080, quad core etc these ppl are knobs that can't see past a 'Cylinder count', bragging rights over numbers and features are an Android game which btw actually need this as their unoptimised os gets buggier and slower over time. These ppl need to go get an android phone instead of complaining here and parading their Santa wish list

I saw that article coming. Hopefully this helps decrease the negative spirits that always seems to follow the low end devices. As a parent I can honestly say that having the 521 and 6 series are great alternatives, cause simply put, I love my daughter to death, but there's no way in hell she's getting a 1020.

You got that right. Child1 got a 710 last year. Later this week Child2 will be getting Daddy's HD7, which he replaced with a 925.

Nokia is going for the kill. I'm happy they're doing their best to get Lumia's into people's hands. The best way to do that is with beautiful budget phones.

Curious to know what the 625 will go for off contract.  the 620 was $250 i believe, that washow much i bought it for, if the 625 is the same price, it would be killer.  I believe the Nexus was $299, the one made by LG, if nokia can get the price around that or lower for the 625, could be a huge seller. 

Yes, you're right. It's expensive where I come from. The low price in the U.S. is probably a subsidized price from Google.

In my country Nexus 4 16gb priced around usd500 when it was released and usd400 as for now. So with expected price for 625 is around usd300 I think it can do well to compete with Samdung's offering such as grand

The advantage of the Lumia 625 over Grand and Win for a market like the U.S. is it comes with LTE. Both Grand and Win don't have LTE.

N4 started with 650 then 550 a week later here. Still filled with dust sitting beside the still shinning S3.

I think Nokia is doing an amazing job of hitting all price points of the smartphone market. Not the apple approach of just selling their old phone down market when they float a new flagship, but actually designing feature packed brand new devices at every point. I think they are a good company and I hope they get the success they deserve.

I stand by my prediction that one day having an iPhone will be the equivalent of having an aol.com email address.

Nice... But Samsung, Apple and HTC has a state-of-the-art phone, at least spec-wise, for the phone nerds... Am I asking too much when I say I want a high-end Windows Phone? The way you guys talk sometimes is as WP isn't meant for phone nerds...

Phone nerds are a small sliver of the phone market.  You have to get the critical mass if you want your platform to succeed, and that means lower end devices.

I agree with that, but I think Nokia is doing well at "hero" phones too. Samsung's GS4 is proof that smartphones have bottomed out as far as innovative new ideas. The only brand new features were gimmicky at best...wave to answer, eye tracking, etc. The other features are just warmed over from the GS3.
Nokia phones don't win on pure numbers, as WP has never done, as WP is considerably more efficient than Android. However, 92x and 1020 are examples of good high end phones, and I think Nokia is still working in this space as well.

Haha, true but I would inch more to make fun of Samsung's "state of the art" Galaxy S 4. Build quality means alot more to me.

That CPU performed almost on par with the Exynos in S3, while the GPU is still top notch. The "thickness-to-camera performance" -ratio of iPhone is also the best out there. iPhone doesn't use managed code, so it requires less ram and CPU-power compared to both Android and WP. iPhone is overpriced, but it is a very good phone, with the biggest amount of content, much of it exclusive.

Apple? Really? What is state of the art about it? Dual core, slightly over 300ppi, 1gb of ram, no expandable memory, no NFC, no wireless charging, etc

Apple's iPhone is state of the art because they say it is. People ooh and ahh over "retna display" because Apple says its awesome... not knowing that its nothing special.

It is not that windows phone is not meant for high end specs. As of right now wp8 does not support 1080p or quad cores, which will change when GDR3 is released so ,competing in high end phone market is difficult for OEMs. Nokia is doing its best upping its services and strength such as camera/accessories. Plus general mentality towards high end windows phone is still harsh with general public (partly due to WP being behind on supporting higher specs) but also due to almost saturated high end phone market. So where is the immediate gain to be had?? Market where ppl are switching from feature phone to smartphone (mainly developing country population), where there are not subsidized plans and where ppl have to buy phones in full price. Cheap phones thrive in those situations. Also whole mantra in Nokia's case is to push the handset to masses and make them aware of the platform. Once they are invested in the platform and what to upgrade, they will choose what is familiar. This has been the main issue in US market for windowsphone in general. Apple was out with their iPhone first and ton of ppl bought it, they starting buying apps and it was familiarized as a standard smartphone. Then android came along took the low end market by storm and slowly the high end market. WP is last to the game and it couldn't capture low end or high end market due to obvious reasons. Now Nokia is going head first realizing and seeing the opportunity. So more power to them. Even in my case I will be buying Nokia 520 as a backup even thought I carry 920 as my primary because at that price point why not? 1020 I can wait until GDR3 is out and maybe there will be 1040 with 1080p display + quad core with pureview. For now 920 will suffice. (Honestly we are just waiting on Microsoft to make some headway to level or surpass other platform)

The Windows NT kernel, which WP8 uses, has support for up to 64 cores and over 16 EB (exabytes) of RAM if using a true 64bit processor. 1080p screens could be added with a driver, just like Windows. These are not specs that drive a market. The only people who care about such things are those who have absolutely no idea what a CPU core really is, they just know more is better, nor do they understand what PPI even means. Buzzwords drive the current smart phone market, things like retina and octa core (really not 8 cores) processors. They are meaningless. People should buy the phone they want, not the phone the marketing firm tells them they want. I have a L920 because WP8 is the best balance between ease of use and customizability.

Well said.... but this type of discussion goes over and over here, almost every topic.... Please come back and control+c control+v your post many times this week....

You said buzzwords drive current market. It is opportunity for marketing so no matter how much you say they don't matter, matter of the fact is they do. Yes WP8 is based on Windows NT kernel but WP8 still has no support for some of gimmick features that other OS have (like you say its just a driver to add 1080p so why did MS not add with GDR1 or GDR2 or WP8). So if you are an underdog and want to set some foot in the market you NEED them. Saying its so simple to use does not sell phones. Yes "people should buy the phone they want not the marketing firm tells them" but in reality thats not happening. I love the thought and enthusiasm but what you mentioned right now is only good in theory. I'm all for WP platform but you gotta agree that MS is lagging a tad bit behind. And in my answer to @diego3666 I was telling him there is no harm in asking for higher spec, but the article Daniel wrote is about how Nokia is trying to infiltrate and exploit the market that has been under estimated and mostly uncovered. If you read it again you might get my point. (On the side note I read somewhere even though NT kernel supports multiple core WP8 right now cannot handle more than 2 cores, not sure how much of that is true. I know cores don't matter but I will redirect you to your mention of buzzword.)

It's not even a driver to support higher resolutions. On Windows, it's simply a matter of telling the driver what resolution to use. The issue is that higher resolution requires a larger frame buffer - more RAM - to describe all those pixels. It needs larger Z (aka depth) and stencil buffers for 3D rendering. That RAM is usually integrated into the main system chip, so your choice of screen resolution is limited by how much video RAM there is. Apps are likely to need more system RAM to support higher-resolution bitmaps and textures as well, possibly more detailed models if they use 3D. There's a reason Windows Phone uses very simple screen objects, they don't need much RAM to describe them.
 
In addition to the screen likely requiring more power, more RAM also requires more power. RAM needs to be constantly powered, and constantly refreshed, otherwise the data in it is lost. Each bit in RAM is a tiny capacitor, a device that holds an electrical charge. That charge discharges itself within quite a short period of time, so it has to be regularly read and written back so that when it is read, there's enough charge left to be detected. (Reading the bit also causes the capacitor to discharge, so the reading circuit automatically recharges it.) More RAM basically means lower battery life, or a larger battery is required.
 
Windows Server 2012 (same kernel as Windows Phone 8) supports 640 logical processors (64 processor sockets) in the higher editions. The lower editions are restricted by configuration in the registry: they run exactly the same code. Windows 7/Server 2008 R2 blew away the old one-logical-core-per-bit limit (32-bit OS supported 32 processors, 64-bit supported 64 processors in Windows Vista/Server 2008 and earlier editions). I think the theoretical limit is 4096 (64 processors in each of 64 groups), but Microsoft only claim to support configurations they can test, i.e. hardware that actually existed when they were developing the OS.
 
The CoreCLR on Windows Phone 8 is a filtered version of .NET Framework 4.5. Basically, the complex pieces used for implementing the 'server' garbage collector, ASP.NET and other server-side pieces, and the complex Code Access Security model are removed. .NET 4.5 supports more than 64 processors, though you have to turn support for processor groups on in the program's configuration file (they are off by default) to have its threads run on more than one processor group.
 
There isn't a lot of benefit in having additional cores in Windows Phone, because the OS behaves the same way as Windows 8 'Windows Store' apps. When an app moves into the background, the OS asks it to persist any unsaved state - so that its memory can be discarded - and then suspends all its threads. The code of non-foreground apps literally cannot run. An app has to register a background agent to keep itself up to date in the background, and the OS is very stingy on giving these agents resources. Foreground apps are actually very unlikely to be able to consistently saturate two cores and get any benefit from more than two cores.
 
In contrast, Android just allows all code to run all the time. That's why it needs more processor cores: because background apps and services can be hogging the CPU cores and preventing the foreground app getting work done. It requires the user to actively manage the running apps and services to avoid runaway CPU usage, which uses up the battery, while Windows Phone (and iOS) follow the motto: "out of sight, out of mind".
 
Additional CPU cores will still use a little power even when 'parked'. Less than they would if they were idle, or actually being used, but again, it's a trade-off of performance versus battery life.

Even without 1080p the 920 and 925 still have 334 ppi. I mean come on, 720p I think would look extremely sharp already on a sub-5" screen. Heck, 720p looks sharp on a 24" screen.

What's surprising to me is that I actually miss my 720 a bit after going to the 925. It just offers tremendous value in a different sort of way. It's little wonder that the 620 and 520 are selling well. There's consumer satisfaction in paying a small price for big capabilities, even in developed countries. Glad you wrote this. Remember that volume is a major driving factor in building out the ecosystem. In hindsight, the 520 may do more for WP than any other model.

i think this is true but also that fact of saying fuck you to carriers and their contracts has people becoming more self aware

True ... Plus prepaid options become better and more versatile, therefore meeting more people with different needs.

I appreciate that they recognize screen size is a major factor for many people. Being able to purchase a large screened, well performing budget phone is easier said than done.

Ahh okay. I jumped the gun there.
I did see that Nokia describes the new 625 as "orange", however I think a neon orange for nokia would go better with their neon blue (cyan) color scheme. The reddish orange 625 could use some cheering up, its too dark.

Very nice article Daniel! Couldn't agree with u more. Android has made so many people go spec crazy it ridiculous. Nokia's low budget phones are great on WP8 but u can't say the same for many android low end phones.

Can't wait to see how Lumia 7xx evolves, will the next version boast the same specs as today's 920 but be priced at under $300?

Well, I think it's rather normal that readers of WPCentral want the ultimate phones and roll eyes at low-cost ones. You must remember that the WPCentral readers is NOT the average consumer. Here you have the fans and the geeks. And we all always want the best...(and the lower the price, the better).
But there's no doubt that the cheap phones are the ones who will sell more and push forward the market. Let us all remember that Western economy is in the sh*t and the majority of people don't have money to waste on expensive smartphones (yes, I say "waste" on purpose. If you have a limited family budget, smartphones are NOT an essencial good.). So they'll demand a low budget one or they won't buy at all. And if people don't buy, companies go out of business. Simple math.

As for the iPhone...the iPhone is the most overpriced piece of crap I've seen. 1000€ for a smartphone? Yeah sure. Let me just go to the bathroom produce gold turds. With the economy on the ground, even Apple realized they had to release a budget iPhone. Which would have happened long ago if they had noticed that, whenever they release a new iPhone and the prices of the previous versions are droped, there's a boom in sales of the older devices.
I've seen that happen a lot when the iPhone 4S was released (people bought many iPhone 3's and 4) and when they released the iPhone 5 (people went and bought iPhone's 4 and 4S).

I'll take "geek" over "enthusiast" any day. To me "enthusiast" has always implied "amateur who buys too much for too much."

What I think the best thing is for windows phone, is that low-end windows phones generally don't suck, unlike low-end android phones. Ew.

Splendid response, Sir Daniel. Very pleased to hear all ranges of good news for the Windows Phone community. Let's hope we see our community continue to develop on all levels as we have been seeing as of late. Cheers!

Something not mentioned in the article is the changing US cell phone subscription market.
When phones are "free" or "just" $99 dollars, people tend to go for the high end, because the true cost is hidden and subsidized. With the small but noticeable shift towards the model that is more common on other countries, where the plan and phone are priced separately (see T-Mobile for subscription, and PAYG phones), the lower end phones will become more competitive and more important.
Apple in particular has had a HUGE advantage with the currently prevailing model, where the true cost of the phones have been hidden. They have very little response to the shifting subscription landscape, whereas a manufacturer like Nokia has ruled this market for a long time.
Will be interesting to see if this shift is just a blip in the US and won't last, or if it's truly a new paradigm. If it is a lasting change, the hardware market will surely change dramatically.

Agreed. That is one of the reasons apple is such a success in the US. Everyone I know thinks iPhones are just $100-$200 and that they can upgrade anytime. They do not understand that a 32GB iPhone 5 costs $749 vs a Nokia Lumia 920 off contract costs $450 and has 32GB of storage. The US market is soon to shift to a market more like the world market, where people will still bug high end phones, but less people will because they will see the hidden costs in their monthly bill. This will provide a window of opportunity (lol) for Nokia and Google/motorola.

Perhaps. One thing Nokia needs is availability. For greater success, there needs to be a greater urgency on having as many of its devices available across multiple carriers. If the 625 is going to be widely available, then it will be a hit.
It's clear that this article came after the negative response to the 625. I just wish we would embrace that yes, it is a good thing to have quantity. WP is still very young and has a lot of ground to fill.

Article is on point! "Spec" enthusiasts are a small minority. My belief is that most people don't care about specs. They want affordable reliability that easy to use.

actually there are a lot of uninformed customer that just expect every high end phone to have quad core cpu just because samsung galaxy have it without them knowing each mobile OS have different level of optimization. they just look at the spec, without ever experience it hands on

Problem is that the sales reps are often spec-enthusiasts, and will affect the buyer. WP absolutely needs better specs for the high end.

And really, the discussion of low end phones, and high end specs are two different topics. So far Nokia has done a very good job on their WP8 low end offerings, but the high end is hampered by WP hw-limitations. There is also the issue of many of the features available on other platforms still not being there.

Happy to know that Nokia is caring their low end customers. While using 920, I want to buy one for my kids for replacement of their Nexians.
But stil discouraged by the following facts:
1. Timing for the distribution
2. WP still limited options of apps compared to Android and IOS, especially the ones working with low spec RAM
I don't know why it takes too long for Nokia and Microsoft to fix this area. Hope they realize that they are killing them self by not fixing these issues immediately.
But as long supporter of Nokia, from 3210 to 920, I wish Nokia could go and compete the others like they done years before.... Go Nokia!

99.9% of apps for WP8 will work with 512MB of memory. There are very few games with very high levels of graphics that require 1GB. I love that Nokia and AT&T have realized that there is a huge market for inexpensive no contract phones. My dad is going to go out and buy the 520 Friday when it's released. That's huge seeing as he's a technophobe. WP makes it easy for anyone to pick up and instantly know what's going on. Apple has this quality as well with iOS. This however cannot be said for Google and Android.

You really need to start proofreading your articles before you post them, Mr. Rubino. You get paid to write these, don't you? We shouldn't have to stumble through sentences like "Michael Morgan, an analyst at ABI research, was quote by Bloomberg saying" (quoted not quote), "We even it see it here on this site" (there is an extra "it"), "losing valuable time and ceding ground to other manufactures" ("manufacturers" not "manufactures"), "Likewise, HTC has been doing the opposite: trying to be a high-end manufacture akin to Samsung and Apple" ("manufacturer" not "manufacture"), "That's $99 for a brand new smartphone, flat in the US" (going by the structure of the sentence, the adjective "flat" has nothing to modify as it is directly preceded by a comma and followed by a prepositional phrase that is not intended as the subject. This desultory adjective can be rescued by moving it to a meaningful location, such as: "That's $99 flat for a brand new smartphone in the US."), "it's the Lumia 520 and Huawei Ascend W1 that is driving the industry" (you are referring to two subjects and, therefore, should have used "are" and not "is". There is also a horrifically mixed metaphor in the middle of the article. There are a few more but I'm sick of typing.
I'm not trolling. I just couldn't hold my tongue any longer. I mean, almost every article you post is like this.

This *is* Daniel. I'm not sure what response you're angling for but you're likely to get something quite the opposite.

I agree with you for every other post, but this one is sorely needed, and in my opinion excusable. I'm sure the editors will tweak it later as it becomes an oft-linked post in troll wars.

They've made it clear here that writing skills are not important to them. Many of us have brought up in the past their shortcomings in this area, but there has been no improvement. I think if WP ever becomes a serious contender in the market then other more professional WP fan sites will appear. Then, perhaps, Mobile Nations will send their writers to English class, replace them, or hire proofreaders. For now we must grin and bear it.

Walk a mile in our shoes, man. If you see how fast we have to operate or if you tried this job for a few days, you'd have a different opinion. We don't write articles with 24 hour lead times, we write them literally on the fly--because that is the business we're in. This isn't Cnet or other tech sites that can take their time.

I'm not going to take 2 hours to get a post up telling you about an app update, you guys wouldn't tolerate it. This site it at the breaking edge of news, so yeah, errors happen and I take responsibility for it. But it's also the trade off getting relevant info, fast.

That and I've been "at work" on the site for 13 hours already today...

Chin up, Daniel. I'm sure you know there are a lot more readers like me who don't really mind all the grammatical flaws in your articles. I'm more inclined to fish out whatever information I can on each post than to put my years of sitting in English Classes to practical use (although I admit to being a grammar nazi on tweets).
P.S., you should get some shut eye too. I think any work schedule beyond 10 hours a day should be illegal...

I wasn't looking to offend you. I get what you're saying about the lead time you guys have. Like GPG said I am also a "grammer nazi".

If you want proof-reading, go read the Wall Street journal or the New York Times or the National Geographic. WPCentral, and others like it, serve a different purpose and caters to a different market.

Perhaps Mobile Nations should hire someone who does nothing but proofreading. They may have the bleeding edge news, but I am starting to see their feeds show up in more and more news aggregators. Which means their profile is going up. Which means eventually they run the risk of being known as the tech site known for good articles and bad proofreading. As a fan of WPCentral, I would prefer the part about bad proofreading not be part of the reputation.

Ya, I had been throwing around the idea that Microsoft and Nokia were more interested in the low end market rather than the high. The people with the high end apples and androids probably wouldn't be interesting in switching anyways so why go after them? Its much better to get 5 people to buy your phone as their first smartphone rather than get one iPhone user to switch.

I still don't understand why a big announcement for a low end phone ain't it easier to give it to every carrier and sell it,commercial'

Spot on article and like someone said a must read for the whole WP community.. Much appreciate Sir daniel

Nokia is way ahead of Microsoft's tablet partners. The $99 521 is a great price point. The $249 (after 2 months) 625 is a good price point. $199 is the ticket. The rumored $320 intro price is Meh. 

Nokia is currently losing on average about 30$ with any Lumia phone sold according to their last financial report. I cannot see how under these circumstances a even lower ASP is good for Nokia or how they are 'well prepared'.

You don't understand how manufacturing works. Technically ever phone sold makes a profit including low end dumb phones, Asha and Lumia.

The problem lies in the fixed cost - design, development, manufacturing setup. Sell one phone or 10 million those cost are fixed. So the more phones you sell you start recovering your fixed cost (amortization). For Nokia most analysts think that's around 10 million Lumias a quarter.

Maybe the idiot analysts will stop downgrading NOK after they realize they're kicking Apples butt in total smart phone sales world wide in the next few years.

Bought a Nokia 1 today and absolutely loving it! Fair enough the lack of screen can be annoying when wanting to "see" or "read" things, also no physical keys can prove cumbersome at best, not having an alert tone or tone of any kind sorta keeps me in the dark too, but at only 587g, its not the heaviest device, the colour grey whilst not being the brightest, still is a bit "out there" but the string that comes with it is super long and can reach any device that i wish to "call" so bonus for including the 3m string, cant wait for 1.20!! :P

Excellent article Dan!!! I really like the replaceable shells.........reminds me of my first cell phone , the Nokia 51xx

Just a question (not being sarcastic or anything). Are people who buy cheap smartphones into downloading apps (which is what makes the ecosystem grow) or do they only want to use them as feature phones but because they are now cheap they buy smartphones?

I'm sure there are people who buy cheap phones just because they are cheap. Then there are people who buy them because they are frugal and choose to live within their means.

Then there are people like me, somebody who needs the features that a smartphone brings that a feature phone does not, but in reality is not a "power user" whatever that means lol or is not a keep-up-with-the-jonses power user. Either way, a person who has no need to buy a $600 phone twice a year.

But becaue I may choose to buy a $300 device instead of a $600 device doesn't mean that I don't use the device's smartphone features or capabilities.

I need my baseball scores and stats fix. I need my maps. I need a good music player and the ability to stream music. I need to be able to access the mobile web. I need to do mobile banking. I need to be able to access my e-mail etc...etc

All things that most feature phones can't do or don't do well. But all things that can be done on a $300 smartphone device as well as on a $600 devive

So in other words, I have the need for apps, and I download them if I need to use them regardless of what my phone cost.

They probably saw what's it like here in the Philippines with all the local/chinese brands churning out cheap big-screened Android phones. Some with gorilla glass unlike the 820.
Check out this one.
That's ruoghly US$277. And there's more where that came from, even coming down to $150.
In comparison, the 820 costs roughly $393-$417 here. 720 at $300-$324, which already is lower specced but somehow more expensive. 620 though can be bought for around $210.
Considering that, it isn't really surprising that Nokia's popularity, especially the Lumia line, is fading here. Add to the fact that they can't penetrate the iPhone, Galaxy S4, HTC One crowd due to late releases...

LOL I know a local cellphone store that stopped carrying that MyPhone brand because of the high rate of complaints from their customers who bought them. I would rather buy a more expensive Lumia than a phone with THAT brand!

Nice article Daniel. There's a big difference between quality of lower priced Nokia offerings and comparably priced Android handsets. I really think this could be Nokia and WP key advantage in market.

You nailed it right, Few more points.
US Carriers are also moving towards European style. No contract, No subsidy, monthly payment model. They are really getting worried about the profit margin. So $100 to $400 range Windows Phone will have more market in the future. WP works smoothly on low end devices than Android. Apple we need to see. By 2014 you will see this change. Nokia is well positioned for this change. They have 525, 625, 725, 825 already lined up for this price range (from 4.5 to 5.5"). Now People can't live without phone, And carriers does not see any value in signing 2 year contract with a customer. If one leave another will sign up for service. Hopefully attractive plans will emerge.
 

As an American, I can see that they will still do 2 year contracts, but now consumers will have to actually pay per month on the device, and they will see how much these devices are actually costing. I am in favor of this method because now I can buy a phone and then pay lower rates if I buy it no contract. Once again, the US is behind Europe.

Its not a perfect analogy, but I do look it as a market disruption/blue ocean type of approach, at least against the flagship leaders. There are already cheap Android products in the market that are selling such large quantities, however it is the experience on these products that is still lacking.
Sure the 920/1020/Galaxy 4S/iPhone 5 are full spec high price products, but when you are going after the Blue Ocean of the masses, the masses really doesn't care about such market leading technology and the associated price, they just want something that does what they need at a price they can afford.
It is how products like the Wii was so successful. Rather than focus purely on amazing graphics and compute power they offered a new experience to the user with graphics that were just ok and marketed it at a cheap price, the result was the fastest selling console in history. There have been plenty of other examples of companies who keep focussing on the high end of the market with big profit margins and leave the lower quality low margin market ignored. What happens is that there is still a market for these lower quality products, but as technology improves the company who started on the low quality product starts making more premium products and can then start pushing the incumbents out of the market given their strength in the market across all levels.
I'd even say that Google use a market disruption type of strategy by simply starting with a basic search engine and just building their brand. From their they have slowly added more and more services that don't have all the features of the big enterprice products, but they have most of what people need at a cheap price to try and encroach on the incumbents domination.
I feel like this is what Nokia is trying to do, build up their foundations on the cheap handsets that don't have all the cutting edge features, but offer a good experience overall at the right price. They will keep making flagships for the enthusiasts, but mostly for R&D purposes. I don't think they will genuinely be a major competitor in the market until the bottom end of the market is the core foundation that they can build upon.

Nicely written article showing the current status of world cellphone market
Talking about htc the worst thing i used to find about their budget phones was that early on they lacked some key features like Front camera even in the $300 bracket and when htc realised their mistakes it was already too late and regardless to say although Sense UI is really beautiful but it still is not that functional
Coming to apple i believe they are loosing their charm because people nowadays want freedom and there are hell lot of budget users in todays market where apple doesn't have any presence. Apple need to realise that gone are the days when people used to wait for the device from apple to release(still there are a significant number of those people but that number is still small as compared to those who are not willing to wait) and this is where companies like Samsung(already regarded the king by a few people but not me) and Nokia(it used to be the undisputed king and maybe it would become if it plays its cards right) have a chance...

Nice work of Nokia in the low end range. I bought my 520 here on Spain to check the OS and i dont want to spend 700 usd in a High end and find out I dont like WP. I paid 200usd for 520 and I'm a hundred times happier with it than with my previous low-mid range from Android.

A neighbor bought the 520 for less than $200. I was expecting it to perform poorly so I was absolutely surprised how smooth and responsive it works! It also feels so good in the hand! Nokia has a winner in this very capable but inexpensive phone!
I hope the 625 will do just as well, or even better, particularly as an affordable LTE phone!
Here's to the 520 and 625 pushing the WP userbase to greater heights!

Also these budget phones act as a gateway - lots of people can afford a top of the line phone but either can't justify the expense or are scared of making a mistake and getting laughed at for paying too much for betamax. If they can dip their toe in with a budget model then often they will gain confidence and start lusting after higher specs and more features. Anecdotally, the budget conscious people I know usually stick to the platform they started on when they upgrade - android and WP. Some get fed up and switch - from android because of poor performance, from WP because of lack of a favorite app.

Great article Daniel! Worth sharing for sure :) I agree with the article, in my opinion the low/midrange phones are indeed the new "high" end. Times are changing: now and before the rush was for the latest and greatest, most expensive tech on phones but now the tide has starting to change towards getting more for less. My first Lumia was the 800 and thou it was almost high end, I didn't start graving the ultimate high end phone: the opposite actually. I switched my Lumia 800 to the Lumia 620. Downgrading that was in some sense but guess what? I'm perfectly happy with my Lumia 620. It does not lose much to the Lumia 800 in the specs and the most important part for me: it's the same size as the Lumia 800 (I have small hands). 
Because the tide is turning, it's REALLY interesting to see just how Nokia and other manufacturers are gonna develope their low and midrange portfolio from now on. The new race is ON! ;)

I heard "6 months from now" back when mango was released. I also heard it when WP 8 was announced back in October. Now you're saying it again. These have been the longest 6 months of my life. They never seem to come.

Well written article; this is precisely the type of article and the level of quality I expect from WPCentral. Very well done Daniel.

i am completely against phones costing more than 597 unless they have 64gb and usb on the go

there are no carrier subsidies in my country and no google play store so i buy most of my phones out right

plus i have to factor in shipping and handling, customs, taxes, vat, etc
a 600 phone would end up costing me close to 1000 or more

customs alone charge 55% of the original price

i am glad that phone are getting cheaper

especially since my current budget is only 1100 for a new device

i go to school and work part time, thats a lot of money

The only problem with this strategy is the cost of data, which is still too high to many who would otherwise jump at the chance to have a smartphone. Manufacturers can't do much about that, so finding ways to make a quality device more affordable, along with smart apps like Data Sense, is their best option.

What? I have the 920, but 625 looks pretty cool designwise, and its bigger than (most?) if not all of Nokia's phones.

The point here is, not everyone is stupid like me and coughs up over $130 to at&t every month. Do I know about better and cheaper deals? yes..... Will I get a low end phone?.... only if I have to.

But there is a market for it and the reality is, low end smartphone market Is bigger than the high end phone market. Don't forget that you are reading this, you are most likely in the 5% of the richest people in the world.