Nokia has just launched its latest low-end phone across the developing world—and it’s about to hit the European market, for around $20 retail.
The Nokia 105 comes at a time when the bulk of the industry’s profits are being made off of the likes of iPhones, Androids, Blackberrys (to a lesser degree), and Nokia’s own struggling Windows phones. But Nokia, as the world’s second-biggest handset maker, needs the cash from the inexpensive side of its product line, as it makes a substantial portion of its profits off of these cheaper phones.
While many may scoff at its lack of Wi-Fi or high-speed data of any kind, the Nokia 105 does have features important to consumers living in the developing world (or for that matter, anywhere else): 35 days of standby battery life (a previous model, the C1, had a six-week standby time), and is resistant to water and dust damage. Plus, the 105 boasts an FM radio and an LED flashlight. (Who among us doesn’t use our phone to navigate in the dark?)
The hope is that if Nokia can get an entire generation of mobile phone users interested in the low-end models, that it could then develop enough brand loyalty for those customers to eventually move to Nokia’s higher-profit smartphones.
“The low-end, high-volume part of the mobile-phone market is a huge opportunity for Nokia in developing countries,” said Francisco Jeronimo, an analyst at IDC in London, in an interview with Bloomberg. “These users will be likely to upgrade to more expensive phones over time, so it’s a good strategy to keep a high market share in this segment.”
As we reported earlier this month, Nokia sustained a first-quarter net loss in 2013 to €272 million ($357 million) compared to its staggering loss of €928 million ($1.2 billion) in the first quarter of 2012. Over that same period, sales of its entry-level Asha phones plunged by 46 percent, too. Sales of basic phones, along the lines of the 105, fell by 21 percent, too.
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