UPDATE 3-Nokia Lumia starts pricing for European launch

Fri Sep 28, 2012 12:42am IST

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* Risks consumer backlash in competitive market

* Will struggle to explain premium-analysts

* Lumia seen as key to restoring Nokia fortunes

By Tarmo Virki

HELSINKI, Sept 27 (Reuters) - Nokia's new Lumia smartphones will go on sale in November, taking on the iPhone 5 and Samsung Galaxy S III ahead of the Christmas season, but some analysts said the prices for the colourful handsets looked high.

When Nokia launched the Lumia 920 and 820 earlier this month, the market was disappointed by a lack of launch dates and prices for the Windows-powered models which are vital for the Finnish company's survival.

Nokia published the first pricing data on its local websites on Thursday, with the Lumia coming in cheaper than the new iPhone 5 but higher than the Samsung Galaxy in some markets. However, the prices are set by local retailers, who buy handsets in bulk from Nokia.

In Sweden, the 32 gigabyte Lumia 920 will sell for around 5,700 Swedish crowns ($860).

That compares with a starting price of 4,515 crowns for a 16GB Galaxy S III on the Swedish site of Expansys, one of the leading online phone stores in Europe. The 32GB iPhone 5 is due to sell at 6,995 crowns.

Adding 16GB of memory costs about $10 to phone makers but consumers pay a lot more. Apple charges about $100 more for the 32GB iPhone 5 than for the 16GB model.

In Italy, the Lumia 920 will sell for 599 euros ($770), compared with 529 euros for the cheapest 16GB Samsung SIII on the Italian Expansys site. However, Italy's top carrier TIM will sell the Lumia 920 for less than the Galaxy.

"Nokia will find it difficult to command a premium over Samsung's Galaxy S III which is the pricing benchmark for a non-Apple flagship smartphone," said Ben Wood, head of research at British consultancy CCS Insight.

The Galaxy S III, which runs on Google's Android platform, launched in May and sold 20 million in the first three months. Apple sold more than 5 million iPhone 5 models in the first three days of sales.

The Lumia 920 and 820 run on Microsoft's new Windows Phone 8 software and both companies are being watched carefully to see whether they can capture market share back from Apple, Samsung and other Android phones.

Once the world's biggest mobile phone maker, Nokia fell behind rivals in smartphones and has racked up more than 3 billion euros in operating losses in the last 18 months.

Windows Phone powers around 3 percent of the global smartphone market, while the Android platform controls two-thirds of sales. Apple has around a quarter.

While people have been queuing for the latest iPhone, with more than 10,000 Belgians preregistering before a local price has even been set, No kia will partly lure back customers on price.

When it launched, analysts said the curved-edged Lumia, which comes in several bright colours, lacked the "wow" factor or game-changing features to challenge the incumbent rivals.

"Windows Phone is still largely an unknown to consumers - they would probably expect to pay less if they are taking a risk," said Ovum analyst Nick Dillon.

"Hardware-wise they are pretty similar, it would be hard for Nokia to justify that extra cost to consumers."

In Germany, Vodafone will sell the Nokia Lumia 920 for 649 euros. It sells the iPhone for 820 euros, the 32GB Galaxy SIII for 740 euros and the 16GB Galaxy for 530 euros.

Nokia's volatile shares closed 2.7 percent higher at 2.05 euros in Helsinki, regaining some of the lost ground from the previous trading session.

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