So far the Nokia Lumia 520 has been a sleeper hit. It’s the cheapest Windows Phone to date and it is constantly topping charts for in emerging markets. It seems we hear stories weekly on how the device is selling well in market after market. Here in the United States it’s available for AT&T as a GoPhone and T-Mobile sells a variant called the Lumia 521.
So how’s it going to fare against further attacks in the low-end smartphone market against competitors like Samsung and Apple?
Over at Forbes, Tero Kuittinen outlines a brinkmanship scenario where Nokia comes out on top. Don’t worry, I wasn’t familiar with the term either. Brinkmanship is the situation where you push dangerous events to the verge of disaster in the hopes that your opponents will have to make concessions and/or back down. In this case, Nokia is in a position to own the low-end smartphone market because companies like HTC, Blackberry, and Apple won’t be able to make appealing devices at low prices.
So if Nokia continues to push the boundaries of what is possible with smartphones built for emerging markets it could very well come out on top. Companies like HTC and BlackBerry will have to respond by producing their own devices for these markets, but if Nokia continues on the path they’ve set they’ll be able to keep ahead of the game.
This is the second time in recent weeks where Nokia's low-end strategy has been highlighted as potentially a devastating weapon against its competitors. Earlier, it was a quote by ABI research and reported by Bloomberg saying essentially the same thing as Forbes. That sort of building consensus is important for long term opinions of the company.
Getting back to the Lumia 520 in particular, that device has been doing well because you can get it for under $160 dollars. The quality you get in terms of the combination of hardware and software can’t be matched by Android. Once again, from Forbes:
"Discussions with both T-Mobile and AT&T managers in New York, Chicago and Miami indicate that the $130 Lumia 521 for T-Mobile and the $100 Lumia 520 GoPhone for AT&T are now substantial hits in the contract-free category. The main draws in both Asia and America seem to be camera and display quality, which are great for the price point. Nokia seems to finally have found its legs in the US market after the deeply disappointing spring quarter."
In essence, Nokia is going for volume in shipments over large revenue margins per device.
What about Apple? They’ve been rumored to have a “low-end” smartphone in the works for quite some time. Indeed, it looks like this September we’ll finally see a smartphone from them that is aimed at emerging markets called the iPhone 5C. Can it out-Nokia Nokia? I don’t think so. John Gruber has a really good post on the situation that you should read. He’s a long time Apple watcher, blogger, and commenter who comes to the conclusion that the iPhone 5C will basically be priced between $349 and $399. That’s nearly $200 more than the average global price of the Lumia 520 even if it comes in at $349.
Windows Phone has some more work in order to close the “quality app gap” between itself and iOS. But Nokia can make a very strong case for itself in emerging markets with devices like the Lumia 520 and whatever else it has in store. Especially if the best Apple can do is produce a device that’s $200 more expensive.
Sound off below with some of your own arm chair analysis.
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