AT&T announced launch availability and pricing of their latest offering Lumia 920 & Lumia 820 with revamped Windows Phone 8 platform enabling cutting edge specs. The smartphone market in the important North America market has so far been a two-horse race and things might change moving forward.
Our Wireless Smartphone strategies (WSS) service believes at $99 price point, Lumia 920 which with its cutting-edge hardware and software capabilities could be easily priced at $200+ subsidized retail. However, now it will hit a very sweet spot in terms of price for the consumers, a superb “value for money” any smartphone can offer this holiday season. Similarly, Lumia 820 is also a solid mid—range offering at $49 price-point. To put into context, AT&T still has more than 35% of subscribers on feature phones as well as millions of existing potential smartphone owners which may be intending to switch or upgrade to fresher advanced smartphones such as Lumia 920 and $99 & $49 are great first time deals to target those subscribers over next 3-4 months. But this also means that with this pricing Nokia has lowered their pricing barrier for flagship devices, so next iteration should have something more cutting edge so Nokia can price it at levels where Nokia can make more profits and also roll-out a multi-carrier launch such as Galaxy SIII.
Additionally, with aggressive collaborative marketing and promotion from Nokia, AT&T as well as from Microsoft on Windows Phone 8 should help cement Nokia’s position in US and get Nokia phones in as many hands as possible. Furthermore, we believe the flagship exclusive is a brilliant move from Nokia in terms of long-term benefits with focused marketing, aggressive pricing and Lumia brand creation in USA. It might though hurt Nokia’s TAM in important US market for short term but gaining presence at three out of top four tier-1 carriers with Lumia devices is commendable and should pacify investors.
Though on a related note, AT&T also announced HTC 8X Windows Phone 8 pricing which is not as aggressively priced as Lumia 920, as HTC lost the AT&T exclusivity spot to Nokia's flagship and instead went for a multi-carrier launch and might hirt vendor's mindshare.