Nokia Lumia 920 Is Not Priced Competitively With Samsung Galaxy S3

Nokia Lumia 920 Is Not Priced Competitively With Samsung Galaxy S3

Nokia Lumia 920 Is Not Priced Competitively With Samsung Galaxy S3

Nokia Corporation (NYSE:NOK), has intentionally, priced its new Lumia 920 phone at a premium, compared to industry competitor Samsung Electronics Co., Ltd. (LON:BC94)’s Galaxy S3. According to reports, the Nokia Lumia 920, is priced  25% higher than Samsung’s Galaxy S3, its closest comparison rival. Nokia risks pricing its Lumia 920 out of market, which seems to be dominated by two giants; the Korean based Samsung Electronics Co., Ltd. (LON:BC94), and U.S. Apple Inc. (NASDAQ:AAPL), with its iPhone devices.

Many analysts were expecting the new Nokia Lumia 920 to be priced somewhere below Samsung Galaxy S3, and slightly above the new HTC X One Android phone. Analysts believe that Samsung is the pricing benchmark of the flagship smartphone devices, not produced by Apple Inc. (NASDAQ:AAPL). ABG Sundal Collier’s, investment research team had analyzed the tentative pricing for Nokia Lumia 920 just before the prices were announced as follows.

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Nokia Lumia 920 Is Not Priced Competitively With Samsung Galaxy S3

This indicates that according to analysts’ expectations, the Nokia Lumia 920 should be the third highest priced product among its competitors, after Apple’s iPhone 5, and Samsung Galaxy S3, inclusive of taxes, and shipping cost. However, according to the latest revelations, Nokia Corporation (NYSE:NOK) Lumia 920, can only claim to be a discounted product in comparison to Apple’s iPhone 5.

Nokia Corporation (NYSE:NOK) had been hoping to restore its lost glory with its new Lumia 920 Windows 8 phone, but that now seems to have jumped through the window, following its relatively high price. Ovum analyst, Nick Dillon, told Reuters today that the new Windows phone 8 OS is new to customers, which means they are likely to exercise caution before acquiring the product. This then means they would not be willing to take such a high risk for the new Lumia 920, and hence would prefer discount pricing on the device.

According to the report on Reuters, Swedish carriers will sell the new phone for a price estimated to be $860 per unit, excluding subsidies, as compared to the Samsung Galaxy S3, which goes for about $681, at one of the leading online phone stores in Europe. In Italy, the new Nokia Lumia will be trading at $770, while Samsung Galaxy S3 will trade at the same price as Sweden.

Nokia Lumia 920’s differing prices according to countries is likely to affect it materially, impacting on its sales units. In Germany, the device will trade at $833, while in Russia; it will be available for 24,990 roubles, approximately $800, as compared to Samsung Galaxy S3, which goes for about $727.

Ben Wood, head of research at the British consultancy firm, CCS Insight, said, “Nokia will find it difficult to command a premium over Samsung’s Galaxy S3, which is the pricing benchmark for a non-Apple flagship smartphone.” Ovum analyst Nick Dillon believes, “Hardware-wise they are pretty similar, it would be hard for Nokia to justify that extra cost to consumers.”

Nokia got it all wrong when they tried to compete with Apple’s iPhone 5 pricing, which tentatively is 20% higher than that of the Nokia Lumia 920, in some countries. The Finnish phone maker has been possibly deluded by Apple’s success , and forgotten about its benchmark market leader in other flagship smartphones, which apparently, is also doing very well in Europe.

Analysts’ opinions, point out that, there is no major differences in the features and class between the Nokia Lumia 920 and Samsung’s Galaxy S3, and therefore it is unclear how Nokia came up with its pricing. The company had also delayed announcement of its pricing and availability dates of its new Lumia 920, during the launch earlier this month.

At the time of this writing, Nokia Corporation (NYSE:NOK) was trading at $2.64 per share, up $0.05, or a 2% increase from yesterday’s close.

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