Nokia's Lumia 710 Wal-Mart Price Cut Not a Sign of Trouble

NEWS ANALYSIS: Price cuts to Nokia's Lumia 710 at Wal-Mart aren't a sign of more systemic trouble for the Finnish phone maker's Windows Phone strategy.

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Days after Nokia's Lumia 710 arrived on store shelves, big-box retailer Wal-Mart began offering the midrange smartphone for free with a two-year contract. Tech writers and pundits immediately commenced to chattering over the implications of such a move, including whether it meant that Nokia's nascent Windows Phone efforts are already in deep trouble.

Yet T-Mobile and Best Buy continue to sell the device for the regular $49.99 with two-year contract. In light of that, Wal-Mart's price reductions seem less a sign that the Lumia 710 is in trouble right out of the gate, and more one company's attempt to give itself an edge over the competition.

That being said, Nokia is apparently dealing with some pricing pressure in other markets. In the U.K., another country where Nokia's looking to make a dent with its new smartphone line, carriers apparently plan to sell the Lumia for a price lower than that recommended by the Finnish phone manufacturer.

"There is always a bit of pushing over price and in particular if the handset is seen as weaker," an unnamed source told the Financial Times Jan. 18. "The Lumia range needs a boost." But drastically low prices could also interfere with any future attempt by Nokia to seed the market with more midrange smartphones.

Nokia and Windows Phone exited last week's Consumer Electronics Show (CES) with a fair amount of buzz, largely on the strength of the newly announced Lumia 900. With a 4.3-inch display, 1.4GHz Qualcomm Snapdragon processor and the latest version of Microsoft's Windows Phone software, Lumia 900 could very well have an impact on the higher end of the smartphone market when it's released (reportedly) sometime in March.

Meanwhile, Nokia is betting that the Lumia 710 will appeal to those in the market for a midmarket device. During CES, Greg Sullvian, senior product manager for Windows Phone, told eWEEK that Windows Phone devices by various manufacturers would aim for customers across the price spectrum. Nokia's emerging smartphone portfolio seems to mirror Microsoft's strategy in miniature.

In any case, that strategy is still very much in the rollout stage. That most likely makes proclaiming price cuts as a sign of trouble somewhat premature.

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