With all the hypes about Nokia’s N900 smart-phone and Booklet 3G, I decided to check out their prices. After all, I develop using QT and I’m intrigued as to how easy it is to make applications for N900 using my existing skills (the netbook – I just want one that looks good and has some computing power).
Since Nokia originates from Europe, you would have thought that they would be cheaper in there. If not, given that the electronic market is pretty much global these days, you would expect pricing should be fairly similar across countries. But to my shock horror, here is what I found:
Using information given on Nokia’s own online stores in countries selling both the N900 and Booklet 3G, namely USA, Finland, Germany, Spain, and UK, the stated prices for the respective countries in their native currencies are as follow:
USA Finland Germany Spain UK N900 569 599 579 599 499 Booklet 3G 599 799 729 699 699Upon consideration of a higher-than-average US State sales tax of 12.5%, and keeping in mind that all prices in Europe are inclusive of such sales taxes, the prices in US Dollars using exchange rates EUR 1 = USD 1.4324 and GBP 1 = USD 1.617 produce the following:
USA Finland Germany Spain UK N900 640 859 829 859 806 Booklet 3G 674 1144 1044 1001 1130I find it amazing, even shocking, that for the same unsubsidised products with the same specs, European customers would have to pay up to 70% more than those living in the US. Given that Nokia originates from Europe, how can they justify these prices differences?
Thoughts:The only reason that I can think of is marketing. Nokia is common place in Europe, whereas in USA it is still relatively new. Therefore, to get the brand really going in the US, they have to offer top-end technology at near-top-end prices. By pricing its products similar to the likes of the iPhone and the Motorola Droid, Nokia places itself at the top end with these competitors. Competitive pricing means consumers may be willing to make a jump to an unfamiliar brand. The still relatively high price point stops Nokia from cheapening the brand itself. However, in Europe, Nokia is well-established, and it seems like they are trying to elevate themselves from the others. The market is also saturated with netbooks. Noting that their Booklet 3G has something special to offer, they can thus market it as a premium product at a high price-point, therefore making the Nokia brand feel more exclusive, whilst not jeopardising losing existing customer base.
Is this a good strategy? In terms of smart phones, with the arrival of Motorola Milestone and Google’s Nexus One, as well as the iPhone no longer being bound to a single carrier, it certainly seems a strange move. Admittedly, the fact that the N900 can be seen as a mini-computer, it is really a toy for nerds and is somewhat justifiable if they don’t want to market it as a smart-phone. As for the sky-high pricing for the Booklet 3G in Europe, well, if they can make enough profit in the US market from it, I guess they can continue with their elevation strategies and no-one can argue. Having said that, an exclusive brand must also be approachable because there is a consumer-threshold where once reached, customers will simply start turning their backs and think they no longer want to be in that club.
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