Want another example of just how difficult it has become to compete against Apple in the mobile phone wars? Consider the dismal profit margins for Nokia’s newest handset, the Lumia 900, according to The Wall Street Journal (via ZDNet.)
Selling for $200 less than the iPhone 4S, the smartphone that “ended the cell phone beta test” earns Nokia just $241 per unit versus Apple’s $459. Plus, the Lumia 900 costs $20 more to produce thanks to its larger screen and more advanced chips.
Of course, Nokia has more than profit margins to worry about in its attempt to become relevant again. And that hill may be a difficult one to climb. After all, when a customer buys a smartphone, they also buy into a mobile ecosystem. For the Lumia 900, this means Microsoft’s Windows Phone OS, which has a long way to go to become as popular as iOS and Android OS.
From 1998 through May 2012, Finland’s Nokia was the world’s largest vendor of mobile phones. Samsung currently holds that title.
As ZDNet concludes:
Nokia needs to pull an Android play: undercut the competition with pricing, sell volumes, lock users into a satisfactory ecosystem, use its new largesse to renegotiate component and retail prices more favorably — and maybe, just maybe, merge with Microsoft to secure future software revenues.
With the sixth-generation iPhone coming later this year, perhaps someone should tell comedian Chris Parnell that Apple’s “beta test” remains alive and well, don’t you think?