The price of Finnish handset maker Nokia Corp.'s (NOK) flagship Lumia 900 smartphone has been slashed to half of its original price in the U.S. The move comes just three months after the product was launched in the U.S. market.
A spokesman for Nokia reportedly said that the move was a normal strategy that is put in place during the lifecycle of most phones and allows a broader consumer base to buy the flagship device at a more accessible price.
As of Sunday, the Lumia 900 can be purchased for $49.99 with a two-year contract with AT&T Inc. (T), the exclusive sole carrier for the phone in the U.S.
Nokia had launched the phone with Microsoft Corp.'s (MSFT) software in April for $99.99, as part of its efforts to regain ground in the smartphone market. The Windows Phone runs on AT&T's 4G LTE or long-term-evolution technology network and was one of the Top 100 Amazon bestsellers.
The phone is seen as critical for all three companies - Nokia, Microsoft and AT&T, to make a device that could dominate the U.S. market.
However, a few days after the Lumia 900 was launched, Nokia was dealt a big blow after it identified a software glitch in the device. The company stated in a blog post that the glitch was a memory management issue and was not related to either phone hardware or the network itself.
Meanwhile, Microsoft said in June that Lumia 900 owners would not be able to upgrade the smartphone's software to Windows 8, due later in the year.
While reporting its financial results for the first quarter in late April, Nokia had said that sales results for the new Lumia devices were mixed. The company said it exceeded expectations in markets including the U.S., but noted that established momentum in certain markets including the UK had been more challenging.
Nokia has been fast losing market share to competitors. The handset maker was once an undisputed leader in the handset industry. However, the company was not able to effectively cater to the market trends and soon found itself overtaken by the likes of Apple Inc. (AAPL) in the smartphone market.
Companies such as Samsung Electronics (SSNLF.PK, SSNNF.PK) have produced cheaper feature phones to satisfy the emerging markets, thus making survival tough for Nokia. Under Chief Executive Officer Stephen Elop, Nokia has been trying to cut costs and come up with more products that satisfy both price-conscious and technology-savvy customers.
In mid-June, Nokia announced a new set of restructuring actions, include cutting 10,000 jobs globally by the end of 2013 and divesting some non-core assets.
Nokia is slated to announce its financial results for the second quarter on Thursday, April 19.
NOK closed Friday's trading at $1.84, down $0.04 or 2.13 percent on a volume of 21.60 million shares.
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