Asha, the cheaper smartphone brand from Nokia is outselling its premium handset brand by over two to one.
The firm’s quarterly results, published yesterday, revealed that the total number of both Asha and Lumia devices sold in the last three months of 2012 was 14 million. Only 4.4 million of which were Lumias.
There have also been rumours that Apple may offer a lower-priced iPhone model, with reports that a senior Apple executive who denied this claim have been withdrawn.
An entry-level smartphone is very different from a high-end smartphone”.
Smaller, cheaper devices have processors from two or three years ago, they have small screens with low resolution, and weaker cameras. They can all do email and the web but gaming and browsing is a much better experience on the higher end phones.
However the difference in cost to the consumer is significant. In the UK a basic smartphone can cost as little as £29.99- while the top end iPhone 5 currently retails for £529 on the Apple UK website.
According to analysts ComScore, by the end of 2012 28% of smartphone owners in the UK had iPhone handsets.
That doesn’t rule out Apple creating a cheaper iPhone that still has high quality components. Look at the iPod range – they started with a premium price product, then they added the mini, the nano, the shuffle – they went to a range of products hitting different price points.
Apple, may be re evaluating that strategy. Is it better to use a tried and trusted design that they know how to manufacture and that the consumer understands, or is it better to design a new model that hits that price point?
At the Consumer Electronics Show in Las Vegas this month, Chinese phone manufacturer ZTE announced plans to launch a lower-end smartphone running on Mozilla’s Firefox operating software in Europe this year.
The strategy of reusing previous year’s models has been quite smart, but there is also an opportunity to design a new product that targets the low price point- and grab extra sales in the process.