Nokia’s Profit Margins On The Lumia 900 Are Razor Thin
Apple is really, really good at selling consumer products at a very healthy profit margin. Because of their economy of scale, they can produce mass quantities of products cheaper than their competitors, and then sell them for a competitive price while maintaining their markup. Sadly, that means less than great news for Nokia.
Anton Troianovsk & Don Clark, Wall Street Journal :
[quote]Nokia Corp.’s new top-of-the-line smartphone sells for $200 less than Apple Inc.’s cheapest iPhone 4S. But under the hood, Nokia actually pays more for the phone’s components[…][/quote]
This report puts the component cost of each Lumia 900 as $20 higher than that of the component cost of the iPhone. The worst part is that the Lumia 900s actually sell for upward of $200 USD less than the iPhone. If Nokia was doing well in other places, it wouldn’t be such a big deal, but they really are having a rough time since the iPhone’s launch. How long until we start hearing the funeral tolls for Nokia? RIM is clearly halfway in the grave. Well, at least they aren’t just another generic Android phone manufacturer like Samsung and LG.