Nokia’s Lumia 920 Has GM Of 50% And Is 20% Cheaper Than iPhone 5
September 28, 2012
By Jacob Wolinsky
valuewalk.com
Various pieces of information are progressively coming together for Nokia and the smart-phone wars. A finish based firm, ABG Sundal Collier, has some interesting research on the topic. A relatively consistent picture can now be portrayed in respect of availability, pricing and preferred carriers. As judged by pre-order data available on the website of Digital-Phone, Nokia’s most sophisticated smartphone – the Lumia 920 – can be obtained for an all inclusive price of GBP 470 (EUR 590) in the UK in the first week of November (5 November).
This coincides with the alleged time of the US launch with existing customers AT&T Inc. (NYSE:T) andDeutsche Telekom AG (ETR:DTE) (FRA:DTE)’s T-Mobile, a week or two after the official release of a series of Windows 8 tablet: this sequence makes perfect sense given that Microsoft Corporation (NASDAQ:MSFT) has yet to officially release the WP 8 software development kit to manufacturers.
The introductory price suggests that Nokia Corporation (NYSE:NOK) (HEL:NOK1V) (BIT:NOK1V) will put itself on a par with existing top-of-the-range Android models from Samsung Electronics Co., Ltd. (LON:BC94) ( Galaxy S3) and HTC (ONE) – and by inference at a noticeable discount to the recently released iPhone 5. On the assumption of a bill of material (BOM) of EUR 190, slightly higher than the estimate for iPhone 5,Nokia Corporation (NYSE:NOK) (HEL:NOK1V) (BIT:NOK1V) would fetch a gross margin in the vicinity of 50% from the ‘gate’ by setting its unit collection price at an average of EUR 400.
Nokia Corporation (NYSE:NOK) (HEL:NOK1V) (BIT:NOK1V) aims to instill demand through product excellence at affordable price points (on a comparative basis) According to freshly published information on the website of mobile phone agent Digital-Phone (see Digital-Phone.co.uk), the Lumia 920 – featuring inter alia augmented reality, imagination stabilization, ultrasensitive touchscreens, wireless charging and penta-band LTE connectivity – can now be pre-ordered in the UK for an “all-encompassing” price of GBP 470 (including VAT and shipping) on a stand-alone (ex contract) basis.
Simple comparison, using a like-for-like approach, thus shows that Nokia Corporation (NYSE:NOK) (HEL:NOK1V) (BIT:NOK1V)’s flagship model is priced at a 20-25% discount to Apple Inc. (NASDAQ:AAPL)’s iPhone 5 and essentially (plus/minus 5%) of that of Samsung Electronics Co., Ltd. (LON:BC94) Galaxy S3 and HTC Corp (TPE:2498) ’s ONE X – the latest additions to the top-of-the-range Android family of smartphones.
Separately, one notes that the Lumia 920 carries a discernible (15-20%) premium to the price at whichHTC Corp (TPE:2498) will introduce its most advanced WP device. Tellingly, its superior qualities notwithstanding, Nokia’s soon-to-be-released high end gadget will cost only ever so slightly more than Lumia 900 its most recent WP 7.5 predecessor. In alignment with its long-term strategy and pact with Microsoft Corporation (NASDAQ:MSFT) Nokia will in all likelihood press for material volume gains once full scale production begins in earnest.
The lower-end variant, Lumia 820 will most plausibly target the broader masses of prospective customers at price points in the region of EUR 250. By next spring, post the Mobile World Congress in Barcelona in late February, Nokia should be ready to push Microsoft Corporation (NASDAQ:MSFT) WP 8 phones into the low-end (sub EUR 150) – allowing it to more effectively leverage its significant distribution apparatus in emerging markets.
Disclosure: No position |
