Should New Lumia Devices be sold at a loss ?

[vlad tepes2]

If you look on expansys.ca you can get the lumia 830 for about $265.00.

 

[wisedesi]

Yes, instead of spending millions of dollars on failed campaign to put on TV shows and ... , just give that discount straight to customers.
You won't even need advertisement, and it will spread like wildfire.

Look at Google, subsidizing Nexus made Google devices more popular.

 

[barnyr]

I will buy either 950 or 950XL to replace Galaxy S5, if priced below $1,000.

 

[Aquila]

Another option is to play it like Samsung - price it high but give people a couple hundred macaroons for trading in their devices.

 

[19Michael87]

I heard a similar story about WP8 back in late 2013

No you didn't. In the Windows 8.1 days Microsoft was not leveraging its huge desktop user base still on Windows 7 as it is doing today. That's a huge difference.

 

[Joseph Avena]

It would be cheaper to work with App developers to get them to make Windows Apps and third party vendors to make accessories. That is why pepole buy andriod and Apple phones. Also, on the business side, they need to kill the Good app and get business to use Windows phone for business.

 

[baandoptager]

They need to be cheap! Yes! Because they don't look and act likle flagship devices but more as "beta" devices for the upcoming wave of windows announcements and updates. (Rolling thunder????).

Also, they have some proving to do and cheap highend phones would be the way to go! Without a doubt!

 

[baandoptager]

I will buy either 950 or 950XL to replace Galaxy S5, if priced below $1,000.

Why?

 

[baandoptager]

I will most likely buy the 950XL at any price point.
That being said it may also be my last Windows phone if MS doesn't bring a better level of support to it and its app environment. Also the carrier issue may change that. If it's not on Verizon I'm not sure I would jump carriers to get it. I agree that a price point about $100 less than other flagship would help.

For me, i can already say that if the 950 XL isn't cheap (cheaper than 400 unlocked). The lumia 735 i have now will be my last windows phone. I will probably wait out for a Nokia Android. (I've simply given up a bit over all these years of being a betatester).

 

[Aquila]

Because they don't look and act like flagship devices but more as "beta" devices for the upcoming wave of windows announcements and updates. (Rolling thunder????)

As in the software isn't ready? Or they'll be talking about features that aren't available at launch?

 

[MikeX74]

If their only goal is to grow market share, yes. If they actually want their phone division to be profitable, no.

 

[NoFlames]

I came here to say this, but I agree 100%, you nailed it!

Selling at zero profit or less means MS would remove any and all profit potential from the WP hardware market. This would make MS the scourge of the industry and draw the ire of companies who rely on smartphone profits to survive. By killing the profit potential in the WP market, MS would also turn away any OEMs currently thinking of releasing a WP device. I personally don't find engagement by other OEMs important, but many others here do.

If MS wants other OEMs to engage, they must take the exact opposite approach, by asking well above average prices.

I actually question whether MS is earning any money on these at all, even at $700. There is no set price at which a phone is guaranteed to make a profit, as it must first recoup the hundreds of millions MS invests in software and hardware engineering. That means the only way to make a profit is by selling high-end devices, with high margins, in large numbers... something high-end Lumias don't typically do.

Assuming these won't sell in large numbers, it's safe to say these devices are already losing MS money at almost any price. IMHO the question is not whether MS should be prepared to lose money, but how much?

I do think they must come in below the price of an iPhone, but expecting MS to go much lower isn't fair either.

Either way, chasing market share is not W10M's goal. Even if it was, it would be far more reasonable to do that with low end devices.

 

[Xaxxus]

yes, but you also need to look at it this way. If you are an average joe looking for a smartphone and you walk into a best buy. You are going to see a bunch of smartphones priced around $299 on contract.

You can get an iPhone, an android device, or a windows phone.

All are priced at a premium price point. Which do you choose?

9 times out of 10 its going to be either an iPhone or an android phone. Nobody wants windows phones, nobody really knows much about them and refuses to try them when they can get an iPhone or android. You have to give people incentive to TRY windows phone so that they will like it and reccomend it to others. If they can get anything else for the same price, they are going to go for the better options.

 

[Paul Cordova]

For me, i can already say that if the 950 XL isn't cheap (cheaper than 400 unlocked). The lumia 735 i have now will be my last windows phone. I will probably wait out for a Nokia Android. (I've simply given up a bit over all these years of being a betatester).

Then your 735i should be you last. You're smoking crack thinking the phone should be that cheap. Comparing the 950XL to iPhone 6s Pl($849.00 for 64G model) and galaxy S6+ edge9 ($749.00) . You're saying they should price it at basically half of current phones. I think if it comes in around 600-650 it'll be a steal.

 

[luxnws]

Another obvious prediction: Microsoft will throw in a one year subscription to Office 365 with the unlimited OneDrive storage and $50-$100 worth of Skype credits with the Lumia 950/950 XL.

What other freebies can they add?

 

[FearL0rd]

sure

 

[a5cent]

Tell that to Apple, because that's how Apple sell Macs to iPhone users and why Mac sales are growing. Microsoft is just betting the other way - hoping Windows 10 desktop users would buy a W10M to accompany it. This strategy makes sense, and for once MS actually has a good footing to start with due to W10 desktop being well received, unlike W8 which had a terrible reputation which dragged down everything along with it. So yes you CAN indeed sell it to people the idea of a fully "in" ecosystem. The issue is going to be Microsoft's marketing effort, which we can all agree on is terrible, but MS does have a unique product experience in hand that cannot be full realised with a mixed environment. Yes you do get some of it, but it's not best.

Okay.

To tgp's objections I'd add, that even if MS could extract profits from the smartphone market similar to Apple's, the two companies ability to cross sell devices and services would still be in no way comparable to each other. Apple exerts far more control over what is admissible to their app store and what products and services may be sold via an iOS app without providing Apple a cut. This limits Apple's exposure to competition within their own ecosystem, which is what some call "walled in". Getting anything Apple to interact well with anything non-Apple is also almost unthinkable, which is the primary force behind Apple's cross selling capabilities. We also have the fact that Apple's own apps are available nowhere except within their own ecosystem, making people think twice about adding anything non-Apple to their hardware collection. MS is pretty much the exact opposite on all those fronts, and many others. Only if all that changes would I accept yours as a reasonable analogy. Only then will cross selling be equally effective for MS as it is for Apple.

As for the rest, I don't know what to say since you're far too vague for anybody to know what you're really talking about.

If you're thinking about universal apps and things like continuum, and how such apps will allow for more similarity and interoperability between desktops and smartphones, then yes, I agree that MS has a path forward there. However, I see that as being far more interesting to corporations than consumers, at least initially. Whether that will pan out for consumers too remains to be seen. If and when it does, then I do see MS getting back to promoting W10M more strongly and again chasing smartphone market share directly.

If you're thinking about specific OS level interoperability features that are independent of MS' UWP vision, then you'd have to explain what the benefits of that "unique product experience" will be, which will compel so many to abandon their Android and iOS devices. I don't see anything easily understandable, highly desirable, and easily marketable in W10M that would cause notable defections.

It's okay that you mention it, but it's not okay to spin it as MS not caring about W10M.

*sigh*

I've repeatedly explained how nothing I've said implies that MS doesn't care about W10M! It shouldn't be that hard to separate the concept of "caring" from the concept of "directly and strongly pursuing market share gains".

 

[MikeSo]

First of all, and before price is even a consideration, Microsoft needs to get these phones into the stores where people buy phones.
They can GIVE them away, but if they can't be found anywhere except at Microsoft Stores and AT&T they're dead in the water anyway. People buy phones in malls, Costco, Best Buy, Target, Wal-Mart, franchise stores etc - and in those, Microsoft have at best had a few cheap 635s, at least here in the US.

Get the phones into the stores. Then we'll see.

 

[Shai Petel]

So, we all know that Microsoft is coming out with new Lumia phones soon, the 950 and 950XL. Considering everything we know about these, from a hardware perspective they are great, but not really anything above what competitors have, or will have in a couple months.

So that leaves the OS. While those of us here who know Windows Phone, have (mostly) come to love it, we are a very small percentage. And, here we are for the third time with a major re-build of the phone platform from MSFT in 5 years (WinMo 6->Windows Phone 7, Windows Phone 8-> Windows Mobile 10).

Trying to get someone to move from their beloved iPhone, or the Android they've learned to live with to Windows 10 is going to be a hard sell. I mean MSTF has struggled with this, as evidenced by their ~3% market share.

And now that the USA is largely moving away from subsidized phones (hooray), people have to think about the cost of their phones when they upgrade. It isn't just an automatic anymore.

So, I think Microsoft should sell these new phones at either 0 profit, or even at a loss. If the phones could be $100 or more cheaper than the competitors, people might seriously consider them the next time upgrade. But seriously, if joe average is at the store, deciding on an upgrade, and he can get a new Android phone a new iPhone or a new Lumia all for roughly the same price, Microsoft will lose 98% of the time.

If on the other hand, the Lumia was $100 or more cheaper, that percentage is surely to go up. If Microsoft could do this for a couple years, and actually get a foothold in market share, and then start to really show off the integration of windows 10 on your PC with windows 10 on your phone, THEN they can afford to start making a profit.

We know Apple can't afford to discount their phones, it is their bread and butter. Samsung couldn't face their share holders with that message. Google probably could get away with it with the Nexus line, but they don't need to, they are winning. Microsoft could easily sell this idea to the share holders, IMHO.

Mr. Nadella, are you listening ????

Sincerely,
A Long-term Loyal Microsoft customer!

well, they have been doing that with mid-low range phones, which was a mistake IMHO. They need to do it with premium high end phones.
Why? Since someone who see a low-cost Hyundai is less likely to want to buy an expensive one, or to even love the brand.
Whereas, someone who see a high-cost premium Tesla/Ferrari is more likely to love the brand and want to buy a mid-low range one if one comes out.

My 2 cents. The way I see it, MSFT had it all wrong with flooding the low-end market.

 

[baandoptager]

Then your 735i should be you last. You're smoking crack thinking the phone should be that cheap. Comparing the 950XL to iPhone 6s Pl($849.00 for 64G model) and galaxy S6+ edge9 ($749.00) . You're saying they should price it at basically half of current phones. I think if it comes in around 600-650 it'll be a steal.

I don't see that being ridiculous. Microsoft is loosing all across the board and they need to knock off atleast a couple of hundred of these phones in order ot really compete. Yes, the G6 Edge + Megastar Ultra SWAG maximum and all the other "fancy" phones start from 599/699/749 and what not, but they are truly "flagships" in terms of quality, design, appeal and functionality unlike these new mid-range generic designs with competitive yes, but unproven hardware specs.

MS has proved nothing with half a decade of Windows phones. Do you think anyone outside is going to buy in on a promise of yet another wave or "Just give us 5 more years"? No freeking way! MS have been ignoring their own for way too long!

They need to follow the example they performed with the XBOX when it first came out and had to challenge more than many consoles, mainly Playstation. People will make up for it in terms of extra and extra is exactly what MS is looking to sell in the future. Exactly like they've done with apple and google within this last year fx. It works! and they need to bring that kinda generosity to Windows users.