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Nokia slashes price of Lumia 900 to $50

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The Nokia Lumia 900 launched to much media fan fare at a low price of $100. After some launch issues which rendered phones unable to connect to the net or get a phone signal, Nokia promptly responded with $100 credits for all of those affected. Despite its cheap price and focus on customer service, sales of the Lumia 900 have been lackluster, prompting Nokia to severely cut the price in half here in the United States. Beginning today, the Lumia 900 will be sold for $50 with a two-year contract.

“This move is a normal strategy that is put in place during the lifecycle of most phones,” Nokia spokesman Doug Dawson, told The Wall Street Journal. It “allows a broader consumer base to buy this flagship device at a more accessible price.”

The Lumia’s contract price for its $100 price tag was aggressive with the hope that it would undercut high-end competitors, like the iPhone 4S, which runs anywhere between $200 and $400 with a contract.

Despite the Finish company’s expectations for its latest Lumia phone, it continues to struggle against Apple and Samsung. Last month, Nokia announced that it was axing 10,000 jobs worldwide by 2013 in an effort to restructure its company. The result of its restructuring will include closures of its facilities in Canada, Finland, and Germany, streamlining its operations.

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According to Nielsen, Nokia had a mere 1.2 percent of the total market share for smartphone users in the United States in the first three months of 2012. 0.9 percent were running on Symbian, while a mere 0.3 percent of Nokia’s phones have been running on Windows Phone 7.

Bernstein Research’s Pierre Ferragu, as reported by Barrons, estimated that between 1.1 million and 1.4 million Lumia 900 phones were sold in early 2012 out of 2.2 million phones that have been shipped globally. He predicts that early 2012 financial results to be announced this Thursday will prove to be pessimistic for Nokia as sales may only peak at a projected 3 million sales by the end of the year.

The failure of the Lumia 900 could be partially attributed to the recent announcement about Microsoft’s inability to upgrade Windows Phone 7 phones to Windows Phone 8. Upgrading to WP8 will require new hardware when it launches later this year. Customers may  be waiting to purchase the latest phones in lieu of settling for a phone that can only be upgraded to Windows Phone 7.8. Or perhaps they’re opting for Android or the iPhone for other reasons. Either way, things aren’t looking up for Nokia.