Should New Lumia Devices be sold at a loss ?

[mvierling]

Microsoft has no clue about marketing or pricing. My guess is that the $950 will sell for $600 and the 950xl will sell for $800.

 

[Stephen Pate1]

They need to seed the market initially but I don't think they will. They toughed it out with high priced Surface tablets even when they were non-competitive on features. An idea that might work is a trade-in program that helps people get off their old Nokia sets onto something competitive like the supposed 950 series.

 

[erzhik]

They should absolutely sell at zero profit, but it will not help their cause. The reason is because now that we have upgrade programs directly from Apple and carriers, it's more about the apps. Yes, I said it...apps. Now that people can upgrade to a $20/month iPhone 6S, nobody will buy Windows devices, especially considering that we don't have any really popular apps. People say iPhone has a lot of fart apps, but they also have every single popular app. Windows has fart apps, but nothing else. Give us phones at zero profit or even at a loss, it will not help unless Microsoft starts investing cash into devs giving us much needed popular apps.

It is no longer about the price of the device, it's all about ecosystem.

 

[luxnws]

It depends on which market Microsoft is trying to sell the phone to, the consumer or the enterprise. If they are targeting the typical consumer, they will have to heavily subsidize the phone.

Windows Phone enthusiasts (who are actually atypical consumers) will buy the 950/950 XL at any price but I think the phones will be targeted at business customers more than Facebook and text messaging students or moms and pops. I also think that the production runs will be conservative so Microsoft doesn't run into the same situation with the original Surface and the $700-$800 million inventory write off they had to take a few years ago.

So it would be a huge surprise if the 950/950 XL were sold at Nexus 5X/6P prices. Wild guess, add on $50-$100 for the 950 and $100-$200 for the 950 XL.

 

[imnotevenhererightnow]

Windows Phone enthusiasts (who are actually atypical consumers) will buy the 950/950 XL at any price
[. . .]
So it would be a huge surprise if the 950/950 XL were sold at Nexus 5X/6P prices. Wild guess, add on $50-$100 for the 950 and $100-$200 for the 950 XL.

I'm a WP enthusiast and really really want to pick up a 950XL, but MS is kidding themselves if they try to command a premium for these phones in the US market where they have little marketshare leverage or a particularly good history of value pricing (I'm looking at you Lumia 830).

Considering the vast amount of value around the $500 mark this year, I don't see any possible reason for me to pay more than a $100 premium over that for these devices. Ideally, I'd like to pick up a 950XL for $500-600.

If they ask more than that for the 950XL, they can forget it. I will (sadly) walk away from WP. I would have to go to Android and wait for MS to get their s#!t together.

 

[romancos]

No!​

 

[anon(5383410)]

Perception is reality. It has to priced in the same range as other "flagships" to appeal to people who buy "flagships" at retail.

I normally don't buy phones at retail but I'll drop $600 on a Talkman as an exception. Plus my Verizon bill wen tform $120 to $51 thanks to Verizon's new pricing structure. Thanks TMobile!

Now if only the Andoid and iOD fanboys would realize that competition, that third horse in the race, is the reason that their cellphone bills have become lower and more customizable then maybe they'd realize the benefits of supporting a Windows Phone.

 

[David Bladen]

It's probably worth looking at how and why Apple and Google price their phones as they do.

Apple are selling a premium product to consumers who are already invested in the iOS ecosystem. The consumer cannot access this ecosystem anywhere else so effectively they are trapped into playing whatever Apple want. Really the only way they leave is because of a bad experience but with Apples tight grip on iOS this rarely happens so Apple can charge what they like. On top of that it is "fashionable" to have an iPhone.

Google are in the such a position that the nexus phones are largely irrelevant to the success android. OEMs will sell low and high priced phones regardless. The nexus phones are a technical demonstration of how android should work and to be honest it beats the hell out of touchwiz or any other skin I've had a play with. If Google sell any nexus phones it's a bonus for them, they make there money elsewhere after all.

Now Microsoft can't go down the Apple route as they don't have enough users locked in. They can't go down the Google route as there isn't enough OEMs making Windows phones. This really leaves only one option to price the phones competitively as premium whilst leaving room for OEMs to undercut them, similar to the surface.

I don't buy this whole windows phone is dead. This would leave a gaping hole in the Windows 10 everywhere marketing line. It doesn't sound quite as good: "Windows everywhere(except your mobile device, you have to have android or iPhone but don't worry you can still use our apps)"

My 930 is due for renewal in February. I've seen what Google and Apple have got, so come on Microsoft sell it to me!

 

[Grant Butler]

They're going to cost Microsoft like $250 to make at most, like the rest of the competition, so there is no need to sell them at a loss, just sell them at the Nexus 5X price point and they still make money, just smaller margins.

I wont be buying them though either way, they're just ugly.

 

[scumdogmillionaire]

Not going to read the whole thread to see if someone else said this but:

They've made it quite clear that the 950 series is for Windows Phone fans and enthusiasts. They're not looking for market share with these phones. Ergo, there is no reason for them to sell at a loss. The people that want them will pay for them. The people that don't want to pay that price for a Windows phone was not their target audience anyhow.

 

[mikepalma]

Should be $99 and $159 respectively. Gotta add millions of clients to the ecosystem so the developers will come. Then in five years or so, when US marketshare is 12%, sell at a premium.

 

[ScubaDog]

I seriously doubt, at this point in the game, Microsoft will sell these at a loss. If they are "getting back to basics", which they seem to be, then they'll avoid losing money. I laughed at the statement that these are supposed to be phones designed for fans/enthusiasts. If that's true, then enthusiasts have pretty low standards.

 

[EspHack]

it could go either way, cheaper means lower quality inside average joe's mind, he may think that this so called android-ios alternative is just a Chinese rip off, but if it is priced HIGHER than the standard iPhone-galaxy then he may think "oh this thing must be what tony stark uses" and a desire will grow, and then he sees a very similar thing(lumia 550) at half the price and he may say "dayumm let me try that exotic shet" and maaaaybe, he likes it and next year saves up for that badass 800$ lumia

but in my opinion what they have to do is stick to a plan, instead of running around trying all sorts of strategies like they've been doing, this creates an image of instability that customers normally avoid, if people keep seeing exotic 800$ lumias in the stores each year they may think that that thing must be doing something right to be priced like that and still holding its place there

 

[umovies]

no, does apple sell at a loss, does Samsung, only google does why because their service and apps cant be uninstalled you have to use them at some point, do you really want Microsoft to follow google, hell to the no, The reason number one that win mobile, isn't doing better is selling thru carriers, fix that and win10 mobile will soar.

 

[AmanBhullar]

I think the features like windows hello and continuum are premium features and camera and hardware is premium as well so they should charge a premium price and follow the business model they developed with Surface. Microsoft has already taken huge losses on the smart phone division and if it is not run in a sustainable way then windows phone can and will not survive.

 

[MeiSquawk]

They have to be cheap. Cheaper than the competition in order to win.

 

[Shobin Drogan]

If Microsoft is not willing to make little to no profit on their newer devices, its pretty evident that they themselves have no faith in their own mobile operating system, and we should too. The 950 should be priced the same as the new Nexus if Microsoft has any plans of succeeding with windows phone, otherwise its doomed as we know it.

 

[missionsparta]

What would be the price point to break even?

 

[Jason2Hendry]

An argument on price is idiotic.

Smartphone users will not switch brand on price. The market is far too mature for that. And Microsft's entry to the market way too late.

A much more productive discussion is understanding who uses which phone, and why. This will lead the manufacturer down a path of understanding the needs of their users and the marketing message used to promote desire. FOMO, FUD, call it what you will. These concepts motivate large numbers of people to try something new if they perceive the _value_ of doing so is to their benefit.

The few people who bought Windows Phones _were_ motivated by price, which is why a discussion on Windows Phone adoption by Windows Phone users completely misses the point. You are ~3% of the market.

 

[pallentx]

No. They've been doing this. The market is holding off on WP mostly because of the app situation. Nothing is going to sell more of these phones until that's fixed. Price the phones for a slim, but decent profit, so that even if you only sell a few its not a loss.