A selection of Nokia smart phone Lumia 800's are seen on display at Nokia world, London. Credit: Reuters/Paul Hackett
Loss-making Nokia has slashed prices of its older smartphone models using Microsoft Windows software, industry sources said on Thursday, a day after investors gave its latest Lumia phones a rapid thumbs-down.
Two industry sources told Reuters that the Finnish group, which is struggling to recoup ground lost to its rivals, cut the price of its mid-range Lumia 800 Windows Phone by around 15 percent this week and made smaller reductions on other Windows models.
Nokia shares continued falling on Thursday after slumping 13 percent on Wednesday as the firm unveiled two new Windows Phone models in what may be the last major shot at reclaiming market share lost to Apple Inc, Samsung Electronics Co Ltd and Google Inc.
Nokia did not disclose the price or roll-out dates of the new models - which with their rounded edges and colourful covers look similar to their predecessors - and its share fell a further 4.6 percent to 1.9 euros by 1320 GMT on Thursday.
Research firm CCS Insight, which tracks market prices, confirmed the cuts and said they were necessary to keep momentum behind current Lumia 800 and 900 devices now when new products have been announced using the updated Windows Phone 8 software.
The company did not officially disclose the price cuts of the older phones but said such steps were a normal part of its business.
The lower prices will hurt Nokia's bottom line, particularly in September and October as analysts expect the new models to begin contributing to results only the following month.
Analysts said the new models would probably reach the market by November at the earliest, with the high-end 920 model - which featured a high-quality camera and touch screen that can be used with gloves - likely to sell for a price similar to Apple's next iPhone. This will be unveiled next week and probably go on sale this month.
The new Nokia phones will also face stiff competition from Samsung, which last week unveiled the world's first Windows Phone 8 model, and new models from HTC and Google's Motorola.
Nokia needs the new models to succeed as it has logged more than 3 billion euros ($3.78 billion) in operating losses in the last 18 months, forcing it to cut 10,000 jobs and pursue asset sales.
Analysts expect it to lose another 700 million euros in the July-September quarter as it sells 3.6 million Windows Phones, down from the last quarter.
In comparison, Samsung said on Thursday it has sold more than 20 million units of its flagship smartphone Galaxy S3 alone in 100 days.
Samsung has become the world's largest smartphone maker as Nokia's share of the market has plunged to less than 10 percent from 50 percent during its heyday before the iPhone was launched in 2007.
Following Nokia's product launch, Deutsche Bank, Societe Generale and S&P Equity Research, all cut their recommendation on the stock to "sell".
"We believe Nokia will struggle to regain sufficient market share with Windows 8 devices to offset increasing pressure on its Mobile Phone business from lowcost Android devices in 2013," Deutsche Bank analyst Kai Korschelt said in a research note.
Retail prices of smartphones using Google's market-leading Android software have dropped below $100, a level other smartphones are struggling to reach due to their high requirements on features like processing power. ($1 = 0.7935 euros)