Nokia about to engage in a price war?
By Stefan Constantinescu on Saturday, January 27th, 2007 at 3:19 PM PST In Financial/Corporate News
Nokia (NYSE: NOK)’s CEO, Olli-Pekka Kallasvuo, told the FT that, "Our latest results are an illustration that if there was a price war, we were not participating."
Funny, then, that Mobile magazine has just reported that in the UK Nokia has just cut the prices on 43 different handsets and the typical reduction is around 10 per cent.
A source told Mobile, "In the eight years I have been working with Nokia, I have never known them to drop the price on much more than ten handsets at a time."
Sound like the action of a vendor involved in a price war, doesn’t it?
Nokia’s figures for the emerging markets show that its strategy is paying off there too. It is competing hard at the low end and enjoying upgrades to its latest products as a result.
Source: The Inquirer
Competition = we [consumers] win!
I guess one way to read this would be that Nokia CEO said that they will not eliminate almost all of their profit margin just to compete with prices. Nokia can afford to cut prices a little bit where needed given its better margins than the competition has, in particular in the low end handsets.