Why nokia's pricing of lumia is a mistake

Well this post is very specific to the Indian market i m not talking about markets like US where the phones are bundled by carriers. In markets like that pricing rarely matters, but a market like India where you have to pay the full price of a phone often tends to be price sensitive. Most people find it hard to pay the price of laptop to buy a phone, it just doesn't make enough sense.

I could remember how we all waited for iPhone launch in India, everyone was anticipating. Vodafone and Airtel who were selling it were very optimistic because of all the buzz it was creating in the market. But when it finally launched nobody queued up to buy it, every one wanted it but nobody bought it, why? the reason is simple. The pricing, we all have a limit to pay.. even if we have money we wont pay for something that's beyond a certain price level, its psychological ceiling. I may buy 3 lotteries worth 20 rs each but i would never buy a single lottery worth 50rs, it has nothing to do with price money. Its just psychological ceiling, my mind just says 50 for a lottery is too high. For phones i have a ceiling of 15k anything above 15 sounds costly to me, and i m sure it does to most Indians, because above 15 is the pricing of net books and laptops, the mind says i would continue using the same phone and rather buy a new laptop instead.

Well for Nokia US as a market is important but to target that market they have undermined markets in the developing countries. Not only the US market is hard to penetrate because of diminished brand value of Nokia, but Nokia has still good brand value in markets like India, where they could have easily stopped brands like Samsung if they had priced the lumia at sub 15k levels. See the number of phones Samsung has on this level, they have flooded the sub 15k range with series of product. Samsung has definitely understood the market, but Nokia has failed again and again.

Another problem with Nokia's pricing is that they drop the prices fast enuf after the launch. People know that a phone that Nokia is selling for 30k will be available at 20k in a few months, thus anticipating price drops people avoid making purchase.

Nokia has a killer product this time with lumia, they have got everything right except the pricing. They are sure to come up with lower priced phones in lumia series but they would make it ugly on purpose. They wont be as sleek as lumia 800.

If Nokia had priced Lumia at sub 15k range which i think is very much possible if they consider the amount of pieces they would be selling. Mobile devices are often hugely over priced with huge margins. I hope Nokia realizes this and drops the price for its own good.