Quote: "The analyst went on to suggest that Nokia and Microsoft are not likely to make a huge profit on the device because of the device's $99 price tag and the cost of the marketing campaign."
Who in their right mind actually thing a smartphone costs 99 dollars? News flash, phones, smart phones in particular cost more than 99 dollars. This is the problem with the US cellular market. Misleading advertising and gullible people who believe the crap fed to them.
Who in their right minds wouldn't have considered that with an unlocked price of $449, suggesting at best a $350 carrier subsidy (and it wouldn't surprise me if it isn't $250-300 with an extra $50-100 spiff from MS) then at the low volumes this is going to sell in, there is not much actual profit after marketing and fixed costs... iPhone costs $190-215 in parts at 10x Nokia volumes and makes about 65% gross margin before the fixed costs are allocated. It's ASP is $200 more but it's BOM is probably only 25% more.
Nokia are probably making 2/3 to a half of Apple's GM and the spending a fair chunk on marketing and carrier incentives - free phones, advertising, etc. The reported $100-200M spend in the US to launch this could work out to $100-200 per phone if they "only" sell a million or 2.
No-one is saying Nokia are definitely making a loss on this, but it won't be some magical money spinner. My guess is that MS is footing the bill for a lot of the push including making it relatively "value priced" compared to high-end Androids and iPhone.
I switched all of my browsers to the Bing search engine in protest of Google's disregard of IP. It turns out, as fresh and new as the Metro UI looks, I hate, hate, hate using it (Microsoft is now approximating it on Mobile Bing).
I had been eyeing Windows phones as a possible alternative if the iPhone screen sizes continues to be limited to 3.5", but now I don't think I could live with it. Good luck, Nokia!
On the other side of your thoughts, I could never live with a cell phone bigger than the iPhone or its copycats. To me, the iPhone (3 in my family) is already to big as a phone (primarily). I'm tired of walking around with the bulge in my pocket looking like a boner. My feature flip phone handles my calls and text fine and it is half the size of my iPhone. Now that I have the new iPad to handle mobile apps, I can go back to using my feature phone again for just phone use.
I love the iPhone's functionality but it made cell phones grow larger than I'd like. I know that it's more than a phone with function that allows me to use my computer less. However, phones this size are not IMO conducive active outdoor activities. That's probably why Apple pushed the Nano with the Nike+ so hard until people got used to and accepted the iPhone's size.
No-one is saying Nokia are definitely making a loss on this, but it won't be some magical money spinner. My guess is that MS is footing the bill for a lot of the push including making it relatively "value priced" compared to high-end Androids and iPhone.
The minimum specs that MS demands for the phone to handle the OS puts the Nokia more expensive to make than an iPhone. They start out at a disadvantage even when the lower productions levels add to the cost.
I expect to hear a lot of positive BS about the phone in the same way we heard all kinds of crap about the "great and fantastic" Zune. I suspect this is going to crash and burn but the news of such will be be clouded in Ballmer-speak.
Comments
Quote: "The analyst went on to suggest that Nokia and Microsoft are not likely to make a huge profit on the device because of the device's $99 price tag and the cost of the marketing campaign."
Who in their right mind actually thing a smartphone costs 99 dollars? News flash, phones, smart phones in particular cost more than 99 dollars. This is the problem with the US cellular market. Misleading advertising and gullible people who believe the crap fed to them.
Who in their right minds wouldn't have considered that with an unlocked price of $449, suggesting at best a $350 carrier subsidy (and it wouldn't surprise me if it isn't $250-300 with an extra $50-100 spiff from MS) then at the low volumes this is going to sell in, there is not much actual profit after marketing and fixed costs... iPhone costs $190-215 in parts at 10x Nokia volumes and makes about 65% gross margin before the fixed costs are allocated. It's ASP is $200 more but it's BOM is probably only 25% more.
Nokia are probably making 2/3 to a half of Apple's GM and the spending a fair chunk on marketing and carrier incentives - free phones, advertising, etc. The reported $100-200M spend in the US to launch this could work out to $100-200 per phone if they "only" sell a million or 2.
No-one is saying Nokia are definitely making a loss on this, but it won't be some magical money spinner. My guess is that MS is footing the bill for a lot of the push including making it relatively "value priced" compared to high-end Androids and iPhone.
I switched all of my browsers to the Bing search engine in protest of Google's disregard of IP. It turns out, as fresh and new as the Metro UI looks, I hate, hate, hate using it (Microsoft is now approximating it on Mobile Bing).
I had been eyeing Windows phones as a possible alternative if the iPhone screen sizes continues to be limited to 3.5", but now I don't think I could live with it. Good luck, Nokia!
On the other side of your thoughts, I could never live with a cell phone bigger than the iPhone or its copycats. To me, the iPhone (3 in my family) is already to big as a phone (primarily). I'm tired of walking around with the bulge in my pocket looking like a boner. My feature flip phone handles my calls and text fine and it is half the size of my iPhone. Now that I have the new iPad to handle mobile apps, I can go back to using my feature phone again for just phone use.
I love the iPhone's functionality but it made cell phones grow larger than I'd like. I know that it's more than a phone with function that allows me to use my computer less. However, phones this size are not IMO conducive active outdoor activities. That's probably why Apple pushed the Nano with the Nike+ so hard until people got used to and accepted the iPhone's size.
What company ever wants to see "slow" steady growth?
Yeah 'cause fast steady growth is just terrible isn't it?
They don't want a replay of when the Kin overburdened their whole system. Nope, AT&T has learned their lesson regarding MS-based phones.
No-one is saying Nokia are definitely making a loss on this, but it won't be some magical money spinner. My guess is that MS is footing the bill for a lot of the push including making it relatively "value priced" compared to high-end Androids and iPhone.
The minimum specs that MS demands for the phone to handle the OS puts the Nokia more expensive to make than an iPhone. They start out at a disadvantage even when the lower productions levels add to the cost.
I expect to hear a lot of positive BS about the phone in the same way we heard all kinds of crap about the "great and fantastic" Zune. I suspect this is going to crash and burn but the news of such will be be clouded in Ballmer-speak.