Microsoft and Nokia to attack low-end smartphone markets

Microsoft and Nokia are planning to tackle the smartphone market and hit hard with new low-end hardware, according to a report by Reuters. With multiple high-end products from Nokia, HTC, and Samsung already available, the company is now looking at the cheaper price points that attract a large portion of consumers. The Lumia 521 is such a Windows Phone that Microsoft hopes will win over the minds of consumers.

Terry Myerson, head of the Windows Phone unit, had the following to say on the move:

"There is an opportunity for us to offer a very high quality device in the mainstream. That's where we've made progress in the last couple of months and it's a strategy we'll continue to explore in the United States."

The Lumia 521, a variant of the Lumia 520 (they just have to name 'em differently), went on sale on the Home Shopping Network last week, where the product has already sold out. The Lumia 521 sports not only 4G connectivity, but also includes a 4-inch screen and a 5 MP camera. If that wasn't enough, wireless charging is also available with optional covers.

The Nokia Windows Phone will go on sale at Walmart starting next week. The $150 price tag will be coupled with T-Mobile's $30 unlimited data and SMS plan. This is said to work out much cheaper than heavily subsadised iPhones and Android hardware. It seems to be working in certain markets and Microsoft hopes to replicate that success in the states. According to the company, it has as much as 20 percent of the market in regions such as Mexico and Poland.

Myerson continues:

"It (subsidization) is a compelling business model for them. If you are Samsung, Apple, AT&T or Verizon, it's where everything's working, you are growing share, you are growing profits. If you are an incumbent with a successful business model, you're not going to be jumping to throw it out. I don't think we've come near to the full potential. Those are our two dimensions here, Office and Xbox. We want to bring to life getting work done and bring to life that serious fun, here on this thing in your pocket. That's going to develop over time."

It's clear that Microsoft has an array of products it can use to add more features to the overall Windows Phone experience. The only hurdle still remains is to sell the platform to the consumer. Do the US mobile operators help matters? Probably not, but Microsoft will have to work its plan hard to break through, as it has done overseas.

Source: Reuters

Rich Edmonds was formerly a Senior Editor of PC hardware at Windows Central, covering everything related to PC components and NAS. He's been involved in technology for more than a decade and knows a thing or two about the magic inside a PC chassis. You can follow him on Twitter at @RichEdmonds.

124 Comments

Cool
Here in Canada you can get a Lumia 520 or 8s for $150. WP's definitely saturating the lower end market, I'm seeing more and more entry level WPs out in the wild. Unfortunately, the higher end devices like the 920 or 8x still seem to be fairly rare.
Opposite here in Australia, see alot of 920 and 820's, no low end though
I think our Australian market is crowded by high end phones, you very rarely see the low end phone, even Android ones. Everyone has iPhones, plenty have galazies and a few of us are using 920s/820s mainly because its the new cool thing :D
This is not true, plenty of people are buying
Let me guess. T-mobile is getting every last one of them to add to there collection of low-end phones.
Dies it have a front camera?
Lumia 520 doesn't have a front facing camera , NFC and flash
Does it have internet sharing?
Unlocked 520's in asia have internet sharing. I have one. Around $200. Drive / Here is limited to one country free, for the moment. Great knock-about phone. Easy 2 days on a charge.
No it diesn't.

:P
Lol naa poor guy :P
I blame the soft keyboard. It's a sucky system. We've all grown accustomed to seeing poorly typed messages everywhere it's almost like our language is morphing into many variants.
... I JUST realized my typo here. lol And I'm getting e-mails of this fight going on in my replies and I'm just like, "How the hell did this star? lol. Oops. :)
START****
Lol!!! Stupid spell check.
In India , Nokia is already doing it
People are quite amazed by Lumia 520 .. Now 5 people out of 97 in my class own a Lumia
Many more are going to buy a Lumia as their next phone
Good news!
That's not surprising, India is one of the biggest markets for Nokia. That's still good to hear though!!
Great!! Keep spreading the word buba!
you have 97 in your class? I used to have 9 when I was at high school, now in university, I have 43

BTW, only one has a lumia, a 620
So wait... there IS a wireless charging solution for this phone? Hmmmm... might make a good backup phone after all...
Yeah with an optional cover though
I have not read anything about Wireless Charging being built into 52X Series, I do not think they support them.
To be honest I think that information is plain wrong. There's no way it's possible.
I'm looking at the inside of my Lumia 520 and there are no conencting bits like there is on the 820 for a wireless charging coil to conenct to.
Thanks for confirming what I have read on Nokia 52X. The Tech required on 52X series for Wireless Charging is not built into the phone itself. 720 Yes
I was surprised by that statement as well. So you can get a wireless cover for the 521? Where?
...but will those even be AVAILABLE is another thing entirely! STILL haven't been able to get my hands on a cover for my Lumia 810... =/
T-Mobile has a cyan wireless charger for the 810 on their site. $39.
It's generally out of stock, though.
This is nice but I really want to see the 720 hit the US. I think that could bring many of my friends to Windows Phone.
Personally I think the 521 has a much better chance of success in the US than the 720. I figure there are two markets, people that want a very cheap smartphone for prepaid plans, and people that want the best smartphone for contract plans (since its usually subsidized to $0-100 anyways). I'm just not sure there is much middle ground. So someone will either get the 520 or they will go all the way with the 920. That is just my humble opinion though and I fully recognize that its probably wrong.
I'd settle for the 620
+1
I just ordered a 620 for my mom for Mother's Day. Much better phone than the 520/521.
Great read as always Rich, I'm going to snag one of these bad boys for my friend. He's been trying to get off of Virgin Mobile for awhile.
I just wish Virgin would finally get on Windows Phone! =(
I know right? With that $35 plan and this phone...man I'd be so set haha
Nice article as usual, although I keep wondering if Microsoft cares about bringing their other core services to the rest of the world.. Like Bing, I know it could be due to restrictions of the governments etc. but common.. Google can do it, why can Microsoft.. ?
Maybe google lobby the government not to..? =[
Aggressive, subversive marketing and an aggressive commitment to the inclusion of WP... I like what I'm hearing out of Microsoft!
So this means Microsoft will finally have a presence in the CDMA dominant prepaid market in the US? Wait, they haven't found a way to even get on most if not all CDMA based contract carriers, and Sprint still waits for the right coding for the two devices promised by this Summer...
Verizon is the biggest cdma carrier and they already have wps
Yeah, the three China Mobile based CDMA devices, which none of them meet FCC and Qualcomm standards. Bring another argument!
You mean the 8x and 822 don't meet FCC and Qualcomm standards?
They are not meeting them at this time, but are due for the update that gives them the Qualcomm coding over the China Mobile CDMA code currently used. You can ask anyone who knows CDMA coding well, and they will tell you the same thing.
You can't sell something that doesn't meet FCC-complient smart one.
Think August 1, where the new FCC standards for CDMA (and GSM) come into effect, and yes, every CDMA carrier has them and will use the "Sprint standard" which is nothing short of full current Qualcomm standards. Also, their deadline falls within the same timeframe the two devices Sprint will carry.
Can we not use the word attack, not exactly a nice way to describe entering their OS into the low end market. Now Android, they attack it.
I think you need to check the meaning of the word attack. The connotations you claim are added by you. Not intended by the author.
I think attack is assumed by most in this sense to mean that they're going to make this segment of the smartphone market a major part of their overall strategy at gaining market share. Perfectly appropriate.
Exactly
I thought the 521 was supposed to be $150 without a service plan? Or have I been misreading that the whole time? (as in I thought you could just buy it for $150 and not have to get any T-Mobile service for it)
Or, get it then cancel..?
You can get it for $150 without a service plan, but then it'd be useless as a phone. The 521 is locked to T-Mobile, and because of the illegality surrounding cell phone unlocking, the only way to legally unlock it is to get service through T-Mobile and fufill their requirements to receive an unlock code.
Or, if you don't care, I suppose you could find some 3rd party unlocker and get an unlock code from them and skip getting service from T-Mobile (assuming unlock codes are available).
Actually my intention was to get it fo my dad (who's on T-Mobile). He refuses to get a data plan but he wants a smartphone. I figured I'd start him with someting like this and if he likes it then I'll get him something better. He'll pretty much only use it as a phone and sometimes to read the news over wifi, so it won't be a complete waste for him.

(I've tried to gt him to tell me why he doesn't want a data plan, but it doesn't really make sense to me. So I gave up on that front),
Well in that case, I'm pretty sure you can. I ordered my 521 from HSN without a plan. I'm not a T-Mobile customer either. I'll probably put it on T-Mobile prepaid or something.
Make sure you don't get the $30 plan, then, because it only has 100 minutes.
Not really limited to 100 minutes. After 100 minutes, you can add money to your account and you're charged 10 cents for each minute of talk.
I think the 521 has a great chance for success here in the US, and I'm not basing that off it selling out at HSN since they probably had low stock (which seems to be the story with all Lumia launches). I feel like Americans are finally waking up to how f***ing expensive their AT&T and Verizon contracts are. T-Mobile knows this, and they have created an awesome value plan for families ($110 for 5 lines!). Of coarse the media, being the stupid bastards they are, seemed to think the iPhone comming to T-Mobile was the biggest part of that news story. But when consumers finally start paying the real price for phones, I think its phones like the $150 Lumia 521 that will win the day, not the $600 iPhone. This is anecdotal, but I'm moving me and my wifes family to a T-Mobile family plan. Her dad told me "Aaron, your not going to like this, but I want to get an iPhone." When I told him it would be $600 he said "WHAT!??? How much are Windows Phones?". I told him less than $300 (521 wasn't out yet) and he was sold. I'm surprised Apple agreed to the iPhone on T-Mobile. They may get some sells in the short term, but in the long term, when more and more consumers move to paying the real price for their phones to avoid bull shit contracts, the iPhone's massive price tag will relegate it to Mac vs PC type marketshare. I fully believe the iPhone would never have gotten the marketshare it did without the contract subsidize business model. /endrant
All thanks to US subsidy phone market .. In rest of the world iPhone has a single digit marketshare
Yeah its crazy how little people understand the true costs of their phones. It took me forever to convince my in-laws to join us on T-Mobile. They kept saying "But on AT&T I can get the iPhone for only $100". I practically had to bust out an Excel sheet to make them understand why they were getting screwed. And don't get me wrong, I don't vilify AT&T and Verizon for it. It's up to consumers to educate themselves.
Sure, T-Mobile's new plans are great for family plans or people that need multiple lines, but for someone like me that only needs one phone, the savings versus quality of service just aren't worth it yet. I'll stick with AT&T because it makes more sense for me.
$30 T-Mobile plan through Walmart for unlimited texts and data (but only 100 calls I think). If I weren't doing the family plan, I would be doing that plan. If you need the calls you could explore the possibility of using Skype. Can I ask, how much are you paying for an individual plan with AT&T and what limits do you have?
Again, you get 100 minutes of talk but can add more funds after that and get charged at 10 cents a minute.
mondokjm, another thing you can do, if you find AT&T coverage is way better than T-Mobiles, is go for StraightTalk. It uses AT&T's network and offers unlimted everything (no throttling) for $45 a month. I don't know of any AT&T individual plan that can match that for value.
I completely agree with you dude. What good is a phone you can't use. Sure in the big cities you get a signal with T-Mobile, but once you leave...you're in dead zones. I tried that 30 dollar plan, it's a good deal, but you can't connect to the internet unless you're on their service, which is pretty limited. In the end there's that old adage saying you get what you pay for.
If MS, Nokia, & T-Mobile really think we are on the verge of a shift in the US from subsidized $70/mo contracts to unbundled $40/month service and buy-your-own-device, they need to do more to make it transparent to the consumer. MS & Nokia should sell their phones direct and unlocked, resist selling exclusive versions, and make clear what networks any particular phone will work on. A lot of consumers would be happy with a 520, 620, or 720 if they knew whether it would work with T Mobile, AT&T, Simple Mobile and not work with other networks. Consumers also don't want to buy a used phone if they can't figure out what networks it will work on and what they will have to do to unlock it. I know I don't. I need to replace my Focus, don't know whether to use my AT&T upgrade on a Lumia 920 or successor, or try something different.
I agree and would love to see more transparancy with which networks each phone will work with. If you wan't a pre-paid option that is compatible for your Focus, I know my brother uses it with StraightTalk for $45. I tried to convince him to test out T-Mobiles $30 plan as well, but he doesn't care as much about saving a few bucks as I do. If you really want to get the 920, my suggestion is to get the phone on contract (which I think is $0 now, or maybe $50), then break your contract and pay the $325 early termination fee. The phone will be locked, but you can certainly use it on StraightTalk since its AT&T's network. Eventually you can probably pay a couple of bucks to unlock it if you wanted to move it to T-Mobile network. Just keep in mind with AT&T phones, they won't work on T-Mobiles 1700 band 3G. But T-Mobile is "refarming" their 3G in certain cities (New York, DC, etc...) to use the 1900 band that AT&T phones are compatible with.

Another option is to simply wait for this mysterious "Catwalk" that Rubino somehow knows will come to T-Mobile.
And alternative plan, if you don't mind waiting, is to consider getting a phone second hand through places like Craigslist or eBay and take it to a prepaid place. You quite often will find a pretty good deal and some of these prepaid carriers do not require an unlock. I just got a red 920 for $200 yesterday on Craigslist and I pay $40 a month on H2O Wireless.
$40 is pretty good, but only 100MB of data. Still think StraightTalk $45 unlimted everything is the best plan if you want to stick to AT&T network.
Very true, but I've known too many people who've had problems with Straight Talk which is why I don't use it. I like the price but don't want the headaches.
Haha yes, I can confirm that. A while back I purchased some plan cards from them, but changed my mind and needed to cancel the order. My first 4 calls to them required entering a bunch of machine options only to hear in the end "Sorry, we cannot take your call at this time." When I finally did get through to them, they put me on hold for 30 minutes while they apparently had to install phone lines into their office (I'm not making this up). In the end because of their crappy service I couldn't get the order cancled and ended up giving the pre-paid cards to my brother along with my original Focus for X-mas.
Yikes. That's some pitiful customer service. :(
Thanks for the advice all, but it does rather make my point. It's all way too complex; and I'm not as savvy as many who post here, but maybe a little savvier than the average consumer. I did not know that you could use an ATT-locked phone on an MVNO that uses ATT's network. I certainly don't know which phones are compatible with T Mobile's old bands, or new bands, or whether they use the old bands or new bands here in Seattle. And would a Rogers phone work on T Mobile, or ATT, or an MVNO, would it have to be unlocked, and on and on. The FCC, FTC, and Congress have let us down here.
Imagine a world where you could get some kind of rebate on a Ford Fusion, but only if you used Chevron gas, enforced with a gas cap lock that only Chevron pumps could open. If you wanted to change gas brands, you'd have to pay a termination fee, or deal with some skeevy gray market unlocker. If you moved somewhere that Chevron wasn't available, tough luck. If you bought a used Fusion, you'd have to figure out if it was unlocked or still locked to Chevron. Most other cars would be bundled with gas deals as well, and it would all be as murky and anti-consumer as possible.
Decades ago, we decided it was in the consumer's best interest to unbundle local phone service, long distance, and phone equipment from the old AT&T. That brought spectacular benefits to consumers and to the economy as whole industries grew out of that decision. We need our regulators and representatives to help the consumer instead of big business, for a change.
Great analogy!!
I totally agree with, buy sadly the Subsidize way is here to stay in America. People want something for nothing, or just want it to seem that way when in reality they're getting ripped off.
Go for it! Flood it like android but you have to be mindful of FRAGMENTATION
I feel like we can't throw the F word at Android anymore. Not after the debacle with WP7->WP8. I'm not so much surprised that some apps only work for WP8, I'm more surprised at the amount of apps that only work with WP7! WP8 was suppose to be able to run all of those apps. MS screwed up big time in my opinion. I strongly hope that this is just due to the transition to Windows 8 kernel and is therefor a one off thing.
Although it is true that the change from wp7 to wp8 was handled badly and has caused a split, I believe this to be only temporary unlike android. Wp7 will die out and these low-end Wp8 devices will only help this process along quicker. (Seeing how early on I was worried wp7 might be used for the low-end market) The exclusives for wp7 will also stop eventually as a lot of these were probably in development prior to wp8's launch. I think time will close this rift. I say this as an owner of a lumia 900. I look forward to upgrading to a wp8 device.
Fu yeahhhhh
If Nokia wants to attack the low end they need to make a Windows Phone in the same price brakcet as their Asha Touchscreen phones.
10k Indian rupees ( 196 USD) is pretty cheap .. No prominent OEM offers decent phones at a price tag lesser than it
The thing is a lot of people don't want a 'decent' phone. They just want a phone that has the basic stuff like Facebook, WhatsApp, WiFi etc etc. That's why they opt for the much cheaper Asha fulltouch phones. That's the market Windows Phone needs to hit.
But what's to stop them offering one for a fiver? That's how low they need to go to get my friends converted that aren't tech geeks. As for my tech geek friends, they despise wp with such a passion they wouldn't even use a wp if Microsoft and Nokia paid them £1000000000 (yes, one BILLION) each to use it for two years.
Yeah but, does it have Instagram?
Still don't know why instagram is so important to people....
The fact here is that its important
I have my umbrella all the time :-P
The fact here is that - I'm an ass. I wouldn't know Instagram if it bit me in the ass. Didn't mean to start a fuss.
Your fine rebel. I didn't think you started a fuss.
I wish - I do! - they would push 7.8 phones to the $100-$130 bracket. Would act like a gateways drug for the real thing! :D Fragmentation be damned. :P
To this article I say, ATTACK ATTACK ATTACK!
Yeah Nokia has the right idea with the base of phones they are making to cover the various price points, I hope they keep pushing that and get more of the range on more carriers.
They should have hit this market hard from the beginning. Windows Phone OS runs like a champ on low/mid level hardware unlike Android.
Great idea for Nokia and Microsoft not great for me. I'm really only interested in flagships and specs and this says to me T Mo is going to be plagued with low end devices and mid-tier phones masquerading as premium hands. I would love to see WP do well and capture market share and the more efficient OS means it can run well on these budget devices, but I only continue to care if that also means we are also able to get quad core 1080p (or 4k) handsets in 4.5-5" size, that can do everything the Galaxy and One can do that come with the Nokia and HTC premium camera tech.
Lumia 520 eating budget lagdroids!
Sorry Aaron but I disagree. 720 looks like it is a great phone and I think it'll possibly even sell more than the 920.
Nope .. In US , phones are subsidized heavily
High end phones could cost as less as 0-100 USD
720 won't have any chance to survive as people just see the base price and not the contract price paid each month
Only makes sense - if their growth has been switchers from Feature Phones, having a solid set of low-price offerings is an important part of the strategy. Starting with exciting phones (900, 920, ...) has allowed them to do this without immediately devaluing the OS as cheap only. This way, they can span the gamut, and offer choices across many market segments.
I agree. The strategy of starting from good quality phones to introduce the OS was a good one. Had they started with low-end, as some have suggested MS should have done from the start, would have forever boxed the OS in the perception in peoples' minds as cheap/poor quality. It's easier to move down than move up the ladder of people's perception.
Doesn't need to be a powerhouse to Stream Music or Power a Browser or some News Feeds and Social. apps.
The $150 phone at Metro PCS and others.
TuneIn needs a 1GB device for example, so it doesn't run on the Lumia 5xx series.
Lumia 520 is selling good in Brazil, almost all online stores are out of stock.
$150 for the Lumia 520, it was $200 for the 610 last year...looks like Nokia/MS will hit the sub-$100 market with WP next year. How epic would that be!?
I'll probably get a 520 as a second phone as I switch sims alot. Its good to have a decent back up phone incase someone needs one. Now I just need the moneys :p
I thought they were already doing this?
The Microsoft advertising got it right. There are two big camps right now, Samsung and Apple. The only way to break into the US market is with Samsung. Nokia is bleeding and HTC barely profitable. LG is not interested in WP. You could force merge HTC and Nokia, MS could issue more bonds and do that. Mobile phones is all about branding, local markets. It takes ages to turn Nokia around, image wise. Volume wise Samsung and Apple will get their components first and cheaper. Then last, WP8 needs loads of bug fixes. I do not believe in the current strategy.
I've had NOKIA before WP and it kept freezing, rebooting. Then I had a bunch of androids, Xperia Play being one of them with the same issues. I've yet to experience that problem with Windows Phone. Not saying it doesn't happen, but for me Windows Phone has been the more stable of the three OS. Going on two years now with no issues. I haven't tried iPhone so I can't comment on them.
Here, here, el-ojo. I have the first Titan with 7.5. I've nearly maxed out the memory, the keyboard takes a hike more often than not, but to say in all honesty, in the almost 2 years I've had this phone I can count on one hand the number of times I needed to turn it off because something went screwy. It has done some weird sh*t, like losing its location data but then out of the blue, it fixed itself. I was considering a hard reset but I kept putting it off. I was rewarded. Now that I've experienced LTE I can't wait to get a 920, or newer but this phone and it's OS beat the living dog sh*t out of every other non-windows phone I have owned. This phone is the reason why BB is minus one customer. Before this phone, I was always wondering if the grass was greener on the other side of the hill. I'm glad I owned those other phones with their other OS'es because they only served to convince me that there ain't nothing greener. What is like - totally rad, and totally awesome (totally) is: people of earth, it's only going to get better!!!
Microsoft and Nokia should launch an MVNO in US and sell their phones exclusively.
Its a tough situation. In order to get market share they have to go all in on low end entry for the us and cheap for emerging markets. But that leaves the famboys out begging for a flagship nobody is buying. I love the 521, but wish it had been the 621. That is a perfect phone for prepaid.
Sorry to say, but i think not having flash for the camera and perhaps no FFC is a deal breaker no matter how cheap the device is.
Of course. I really think they should be mass producing these Lumia 520's and 620's and release them to all budget carrier's in the USA.
Love my windows phone.
Few things Nokia needs to do:
1. Launch a real flagship with 4.5 to 5 inch screen, quad core and light slim form factor
2. Launch phones with metallic finish in US, something more professional looking
3. Launch a phablet or two..
4. Replace 920 and 820 with thinner lighter form factor
5. Push Lumias to lower price points in emerging countries
6. Stop being always one step behind the competition.
7. In markets like US where phones are subsidized, there is no point in skimping on specs..go for the best specs and charge $199 or $250 subsidized.
8. Bring dual SIM phones to emerging markets
Smart move due to the upcoming financial crash
My mom ordered the 521 from hsn. She had a 710 but killed it in the washer and paid 200$ for a low end Samsung android. She hates it and plans on selling it once she gets the 521. Its supposed to arrive Monday
Why do US Model Numbers always have to differ from that of the rest of the world? ? ?
it is available in nokia priority since last month :D may b u need to chk again :P
Here in Brazil I'm seeing lots of Lumia like 710 and 800, but often 620 and 920
This is great news. Countries like mine need low end models
In Pakistan, we don't have Nokia Lumia 520.
They said we have shortage of it. Idk what to make of it :/ Seeing many Lmuias 920 and windows 7 phones though
How do you think Android got some much market share? They attacked the low end market like it was going out of style and gain about 75% of the low end market. Apple only has the Iphone and everyone else was just making high end phones and let Android control the low end market. This is very smart for Microsoft and Nokia.
What they need to do is redefine what the lower end of the market is. Take the lumia 520 for example. The 480x800 screen is right on the money for a good budget device. The processor is a good dual core qualcomm S4, which is simply fantastic for an entry level device. The camera is nothing special, but sufficient for the price. 8 GB of storage with a microSD slot is great.
From where I'm standing, I can only see two real problems with the lumia 520. The amount of RAM is just not good enough, and the glass covering the screen is just garbage. If Nokia would spend the extra $1.50 per glass panel, and $5 for an even 1 GB of RAM, they would have an entry level device that performs as well as some devices costing more than 200% as much. The 520 with those changes selling for $10 more to make up for the increase in conponent costs would just be fantastic value.

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