Heaps pressure on its struggling rivals.
It is no secret that Nokia has such a vice like grip over the global mobile phone market because it uses its size to swamp emerging markets with handsets at such low prices rivals can’t compete. So the likes of Samsung, Motorola, Sony Ericsson and LG aren’t going to be happy about this at all…
News is breaking that the Finnish giant quietly cut prices across many of its phones last month despite the entire sector struggling with profitability. RRPs dropped by as much as 10 per cent on distinguished models such as the 5310 and 5610 XpressMusic twins and the multimedia centric N81 8GB (below) to name but some.
Addressing the claims, Nokia would only state “If we would start to comment on prices there would be no end, they are changed so often.” Hardly the greatest rebuttal.
Of course such silence is to be expected. Investors aren’t fans of seeing a company voluntarily squeeze its revenue and profit streams (even for the long term greater good) and it is certainly a ruthless ploy for a company with a 40 per cent market share. In fact it could even be seen as verging on bullying following the catastrophic results from Motorola and then Sony Ericsson. Still, when a heavyweight senses blood can you blame it in going in for the kill?
Just ask Walmart, Tesco, Microsoft, Sony, McDonalds, Ford…
…oh and if want to know what happens when you don’t just ask IBM.