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It Costs $450 In Marketing To Make Someone Buy a $49 Nokia Lumia
benfrog writes "According to market-share estimations compared to marketing dollars, it costs nearly ten times as much to sell the Windows Phone-based Nokia Lumia as it does to buy one. Other analysts agree with the low sales numbers."
Nokia Lumia does not cost $49 to customers. It costs (and makes profit of) $49 + whatever mobile operators make during the two year contract. God americans are stupid if they still go for this marketing trick. Even Slashdot runs bullshit story like this!!
On top of that Nokia is trying to capture US market, so they can spend more on it while they generate revenue from rest of the world.
How about they give me $400 directly and then I'll pay the $49 for the Lumia.
They've saved $50!
I wish a Nokia costed just $49 and nothing more.
...why don't they sell handsets in an honest fashion that aren't tied to a specific carrier, so that we can buy a GSM phone if we like GSM networks, or a CDMA phone if we like CDMA networks, and then we buy our service?
Oh, right, because they're both evil and stupid to think that we'll shop around for new providers...
Just like we shop around for insurance?
Do not look into laser with remaining eye.
The low $199 price of the iphone really caught most carriers off guard -- the standard pricing for smartphones in those days was around $350 *with* contract. So the Instinct's original pricing of $179 had to be lowered to $129. Sprint HEAVILY marketed this thing, with many ads showing the "advantages" of the Instinct over the iphone. Hesse, CEO of Sprint, spent $100mil on marketing the Instinct.
However the Instinct (or In-stink as its customers would come to call it), was really a terrible product -- terrible web browser, lame features, AND worse, required Sprint's brand new, and very pricey (for Sprint), data plans.
Sprint refuses to release real sales numbers, but estimates by analysts were in the 350K range -- perhaps after a year it might have hit 500K. So that is at best $200 of MARKETING COSTS for each Instinct sold.
Hesse would never again stink that much into marketing a phone. Indeed some blame that burn episode for Sprint's rather poor marketing of the Palm Pre, a much better device that never was really given a proper chance...
The iPhone worked because people could use it as an iPod, and it had the whole exclusive iTunes infrastructure behind it.
Blackberry's killed it with their keyboard.
Android didn't get popular until the Droid came out with their keyboard, giving it that differentiation from the iPhone, and that it was available outside of Cingular/AT&T.
Windows phone doesn't really offer any exclusive hook that'll sell itself. It has a nice UI, but the other systems are pretty good and ultimately very usable.
I suspect they'll have to tie in deeper with the upcoming Windows 8 infrastructure to get Windows Phone to sell. Or maybe XBox games. But right now it doesn't have that absolutely exclusive must-have killer app or selling point.
It's really shame, because Windows phone is a perfectly fine system that just needs a critical mass to get going.
Yeah, the Microsoft Kin was another example of epic fail.
anyone with previous experience with older versions of Windows Mobile can tell you really it sucks compaired to iOS or Android. Nobody goes for a windows phone these days. Windows 8 for PC is coming out, and its interface is basically identical to the mobile phone version. Once people use Windows 8 (PC) for a couple years and are more used to the new desktop UI , the mobile phone platform will become alot more appealing to many people who want the familiarity of their PC on their phone. Nokia was a giant in the cell industry but has been slipping lately. They should focus on android offerings and wait a little after windows 8 is on more peoples desktops before trying to push a windows phone. Once windows 8 for pc is released though, people that have the new windows phones will probably start to appreciate them more. That being said, I dont like the new windows 8 for PC interface, so i wont like the windows phone interface (still), so I wont be getting rid of my android anytime soon. It did take many years before i was willing to give the new stylish windows XP a try and give up the windows 95/98 look...
http://interserver.net/
If you're "making" someone buy the phone, it's not marketing, but coercion. I'm happy to call phone companies out when they do evil shit, but this is merely annoying, not coercive. I'm happy to also call out the Register when they have headlines that are full of shit.
As another post mentioned, $49 is the sticker price, not the total revenue earned from deals with service providers, crapware, and other annoying gimmicks.
And just as the revenue only makes sense when considered over the life of the phone, the marketing only makes sense over a period of years. This is a big initial push, it's risky, it might all fail. I'm fine with that because it's not my money. (Except for any subsidies they get from the government trough, but I don't think much gets pumped into ad campaigns.) But presumably the big push will come to an end, and if they have a good body of relatively happy customers, they get free marketing from word of mouth, and they can do much cheaper marketing that is directed towards existing customers.
They should start turning a profit in about -22 years.
Sheesh, evil *and* a jerk. -- Jade
Perhaps the problem isn't the marketing, but rather that your phone selling strategy is off. How come T-Mobile still does not have the Lumia 900? Still waiting ....
Yes, but how much RESEARCH does it take to figure out that "It Costs $450 In Marketing To Make Someone Buy a $49 Nokia Lumia" ??? That is the real question!
With MS comes deep pockets !! That's why Nokia went with WP !! I saw this already at Mix10, so the pair were brewing this even before Elop got there !! Sneaky dogs !!
No matter how you feel about the late Mr. Steve Jobs, that guy was a real asset to Apple, Inc.
The marketing department of Apple, Inc. did not need to "sell" their wares as much as their peers in other companies (like Nokia or RIM, for example), as Mr. Jobs himself had done most of the selling.
There is a double whammy for Nokia, though
By abandoning all their previous phone OSes, and blindly adopted the Microsoft Windows as their one-and-only OS, many Nokia users - even those who had used Nokia for many years - had started looking at offerings from competing brands - from Apple, to Samsung, to (at a lesser degree), RIM.
Muchas Gracias, Señor Edward Snowden !
every Slashdotter wonders why they also can't just start at the top.
I think people are overestimating the power of advertising.
No, they don't have to rely on anything to sell windows 8. It can suck outloud (think ME, Vista) and will still get picked up by all the big vendors, it will show up on a lot of new PCs, people will get forced into it at some point one way or another (work upgrades, using a friends computer, etc..). MS doesn't have to do anything at all to get Windows 8 for PC sold and showing up on a decent number of systems. Windows Mobile is where they don't have decades of experience and reputation that they can rely on to guarantee sales.
http://interserver.net/
Yeah, I know I'm just stupid open source open source hardware jerk but when asked, which is quite often, which phone to buy I always say avoid anything related to Microsoft. Now admittedly my personal anomosity goes way back to Gate's letter against hobbyists using his software without ponying up pennies to him. Still today though my advice to everyone is to not buy anything that requires you to pay monies past the original transaction.
Time is what keeps everything from happening all at once.
Nokia Lumina includes Windows Phone. It is implied to be version 1.0 since MS marketing did not mention which version is installed on the phone. If its not obvious, MS Marketing will tell you.
From the headline, each version jump of Windows Phone seems to be worth $49 to the consumer.
MS should release Windows Phone 9.183673469387755. You know they are going to.
9.183673469387755 x $49 = $450.
Assuming a fixed cost of marketing of $450 per phone per consumer for future releases, at MS Phone OS v 9.183673469387755, the phone advertises itself for free.
I leave it to the reader to determine what will happen after.
That's how much I took in before they got me to use Bing.
Table-ized A.I.
nuf $ed
Table-ized A.I.
It costs $449 in hired goons to make someone buy a $49 Nokia Lumia.
How much does it cost to buy a slashvertisement against your competitor, with a headline that implies that the competitor's product has negative value?
I presumed the lack of volume is due to Win 8 phones coming out end of this year? The older win7 phones can't be upgraded to win8 due to hardware limitations ... they'll only get up to win7.8 update and the apps for win8 may not work with the older version. So with this in mind, why would you buy a win7 phone right now?
Windows Phone 7 is also abandoned. Maybe not yet by Nokia, but MicroSoft has already publicly abandoned it, which will make the current line of non-smart phones (S40 operating system) from Nokia the only non-abandoned platform they are selling.
I was promised a flying car. Where is my flying car?
Heineken and a few other breweries are the only ones that will give a loan to the owner of the bar, since bars and clubs are a high risk investment and most banks won't get involved. Because the breweries aren't banks, they don't have to hold themselves to a lot of regulations that forbid banks from controlling their loaners too much. This means that the breweries often end up owning the building after a previous business goes bankrupt and now most bars and clubs are effectively owned by the breweries. Once they figured out this method, they started to actively buy real estate that houses bars, restaurants and clubs. The real kicker is that those bars pay more for their beers than you and I pay for the same beers in the super market. The innkeepers have to pay rent, make a living and pay their staff, so variation is hard to find and prices are inflated due to the lack of competition this sort of practice brings. Add to that the high alcohol tax and it's no wonder that bars and clubs are such a high risk investment....
I was promised a flying car. Where is my flying car?
Dumb phones are still going, but how long they will last is anyone's guess.
Well, basically, I think they will last for a very long time.
At least until a smart phone becomes cheaper than a dumb phone
I use a "dumb" phone to accept my SMS confirmations for bank transfers etc. That way I can use the banking site from my smart phone without worrying about some malware creating transactions and confirming them by intercepting the SMS. There is also the advantage that I always have a back-up phone, my dumb-phone batteries last about a week in standby and on PAYG it has nearly zero cost (I have to make a call or sent an SMS within 3 months to keep it active).
Give me $400 and I'll get one. There - I saved them $50
Sounds like the Iphone when it was first released. Same issues with iTunes, no copy paste, etc.
As long as Windows 8 released, Windows phone Apollo 8 is coming out soon properly in October or Christmas’ day. But the real release date is not told by Microsoft yet. I believe all of us will keep our eyes on the accurate date to come. Here is the latest information about Window phone 8.
Deleted Files by mistake but want to get them back? Files Recovery
It went from 1.93 to 1.80; you can't see the numbers at the end because it is currently at its lowest and the graph is clipped at the lowest point. I don't know in what world -5% is catastrophic; certainly not in mine.
Buy a computer with Windows 8, get a free Window Phone with 2-year contract.
Not that the artificially inflated sales figures will save them, but by then maybe Nokia stock will be worthless enough for Microsoft to buy them (that is the plan, right?) and begin suing everyone they can with Nokia's patent portfolio.
www.gaiageek.com
The price of the phone is subsidized. The actual cost of the phone is probably close to the $450 number, as most phones are.
You can't compare the cost of marketing to the cost of the phone after the carrier has thrown in their $400.
At least try to understand what marketing consists of before trying to fire pot-shots at Nokia. They're selling the brand, with the aim of getting people to keep buying Nokia phones at the end of each contract cycle. I know it's awesomely fun to have a go at shitty marketing and marketers (hell, I love it), but this is not such an occurrence.
History shows that companies who 'partner' with Microsoft generally live short after.
Because neither MS or Nokia did the smartphone earlier then Apple did.
Come on, how much of Jobs cock do you have to swallow to be that blind of basic history?
Apple was not first to the market, it is in fact one of the last. Only Android and Meego (or whatever it is called now) are newer.
A clue might be in the 7 behind Windows Phone 7.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I am sick of these 'marketing analysts'. Two facts about the Nokia Lumia, it does not cost $49, and it is easily the greatest damn little device anyone I know has ever seen; it doesn't need any advertising, the stores can't even keep up. I want to know who these analysts work for, spreading baseless bullshit 'news' all over the damn place. Every time I hear from these retards they try to convince everyone that Microsoft is selling some product at a loss.
Let me guess, when Ballmer did the monkey dance, you were the one person in the world who was sexually aroused?
I have seen some delusional posts in my time but this one takes the biscuit. You don't deny any of the shortcomings, just come up with endless excuses or even downright admitting it is a huge failure and that is what you think of as a rebuttal.
With fans like you, what need has Windows 7 of enemies. You are supposed to damn things with faint praise, not by dragging them through the mud and stepping on their wind pipe.
Thanks for this amazing post, if I had even the slightest incline to perhaps one day try a MS phone, you have thoroughly killed it off. Oh I get, you are secretly an Apple fanboy and seek to discredit MS in disguise? Good job!
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
You have been saying this about every MS mobile release since the dark days of CE. Then 5 was supposed to be the savior, then 6, then 6.5 then 7 then 7.5, then 8 and no doubt 9 and 10 are already on your horizon as the version that will save you from damnation.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
When Guy Hands took over EMI he discovered, using the same sort of calculation, that he could have fired the entire marketing department, attached a £50 note to every sold CD, and still saved money!
The iPhone runs iOS apps. WP7 would have been really competitive in 2007.
A windows phone fan gave me a demo of their phone a few months ago, it was surprisingly slick. I could see people buying it if it ran either Android or iOS apps. But right now it is like the BeOS is to desktop operating systems. It may have some cool features, but it is incomplete demo-ware and it is wholely incompatible with any competitor OS, so programs can't be ported quickly.
Nokia needs to somehow get themselves out of this suicide pact with Microsoft and start selling Android phones.
Once they break out of the death spiral they can investigate how to embrace and extend Android with some of the talented folks they still have on board, like the Qt team.
OpenWebOS may make things interesting again soon. Unfortunately, the initial focus is on tablets. The UI, Unobtrusive notifications, Gesture navigation, synergy, cards, stacked cards, tabbed cards are still far ahead and more elegant than the other mobile OS's.
Advertising to me all seems to be a spend $10 to make $1 game. The only people who are really good at marketing are marketing companies who are great at marketing their own services.
If you are not allowed to question your government then the government has answered your question.
http://pocketnow.com/2012/07/09/satisfaction-rates-for-lumia-900-owners/
For $450 I can buy a pretty decent office chair.
However the Instinct (or In-stink as its customers would come to call it), was really a terrible product
Guess they should have called it the iStink.
FTFY.
Have gnu, will travel.
I got one because I needed one to test a program on, which I still haven't gotten around to doing because we had to have our Central AC Unit replaced, and I"ve been a good bit of minor repairs around here by the grace of God. Anyway, I purchased it because I took two C# classes from a community college a while back, and I did a little bit of work with it. Mainly just hobbyist type activities. I'm not an expert, but I know more than some of the average bears. I was interesting in porting one of those projects to Windows Mobile and other mobile devices, but mobile first, since it would be native. Anyway, let's cut to the chase, I turn the speech recognition off, and it still comes on. It is lacking in many features, and it is a bandwidth hog. I never had any intention of playing LIVE games on here, but it has been tempting since it can be really worthless at times. It's turned into a paperweight atleast four times without installing anything on it or visiting many websites at all. Now I've learned my lesson. It would be very foolish to go boasting over which operating system is better or more cost efficient. I got stuck using GNU/Linux for quite some time, partially by choice, then by my refusal to purchase Windows licenses and not wanting to go to the slammer or pay $10 million dollars for one license, which costs them about $3 to create comparatively with the volume of licenses that are sold on the market today. So I finally end up with Windows 7 smleven and all the nicknacks and whattymadoos that microsoft usually gives upstarts and students but made me pay to get, and then I decided, it wasn't even worth it. True, I got to play with Windows 8, which for some, is probably the best thing since the first person sweetened tea or sliced bread, whatever your region may prefer(I often playfully scoff at types of vernacular, but like I said, I'm just some dude). Honestly Windows 3.11 was more exciting for me. It's all been done.
So what?
This is common business practice. They're not selling the device; they're selling the subscription. Every month you pay. . , how much for the service? In about half a year, the product is sucking in profit.
X Box lost a lot of money at the start also, and they still don't make any money on the actual hardware. And yet they're well in the black today and making billions.
This is a dumb story designed to create a negative value impression of the Nokia device most likely, paid for by competitors.
According to this incredibly long, but thoroughly entertaining and educational blog post, the carriers are apparently refusing to sell Windows phones ever since Microsoft bought Skype. He references Elop's own statements to that effect multiple times.
Speaking of the 121 errors, he does have a truly funny take on what they mean to a Finnish Nokia fan:
I'd buy one if they paid me just $200!
I don't care how much the ad costs,no one can make me buy their gizmo's.
Most American bars were also heavily financed by the beer companies before the advent of prohibition. It wasn't uncommon to a have a Miller only bar right across from a Budweiser bar, with furnishing (even entire bars, seats, spittoons, and memorabilia) and advertising/store signage (not the cheap paper or laminate kind, but like outdoor permanent kind) provided for free to the owner of the establishment. I believe the reason this practice has since been reduced from what in many cases was almost split ownership between brewer and proprietor has to do with quelling the concerns of some prohibition supporters who were weary of the return to the pre prohibition times. Many were especially concerned by what they saw as too much power concentrated in one industry. While I tend to think of them as religious nutjobs and nannystaters, it is a fact that for many years prior to the slow expansion of prohibition through city councils and state legislatures that the main source of revenue for the federal government came from the sale of beer. That is pretty amazing to consider, and would suggest that the federal government may have been a little too cozy with beer companies. Even defense and energy today can't possibly be so enmeshed in Washington that a single industry that basically bankrolled the feds. Another similar post-prohibition law aimed at the same type of concerns was making it illegal for the producer (Bud, Miller, etc.) to also be/own the distributor. This law is still enforced today for better or worse. Anybody curious for more info on this strange time in American history should check out the Ken Burns' documentary "Prohibition"; it is also my source for the information. I even think it can be watched on PBS's website for free (in the US only). I think the whole thing, while still a major blunder makes a lot more sense after seeing it.
Or by the same logic, perhaps these items are part of the reason for the stagnant sales of WP7 despite some compelling ideas in the design. Sure most of that shit won't matter to most individuals, but when competing against mature half decade old OS's you can't get off by just claiming that in 2007 your competitors were in the same boat. 7.5 got rid of most of the really irritating ones, but a few persist.
At the same time as others have pointed out Android and iOS also have a long list of issues. Only the buyer can decide whose feature-set works best for them. For me on my LG Quantum which I bought used to play around with WP7 when I broke my old phone, most of that list isn't an issue. But a few things are, especially the surprisingly bad way in which multitasking is achieved. It makes the iOS method seem elegant and powerful by comparison.
I've ended up liking WP7 a lot more than I expected after previous experience with it's relative Windows Mobile, but it has it share of faults, including a terrible selection of decent apps, where you often pay for apps you can get elsewhere for free or find they simply don't exist. When I'm looking to upgrade in the next year I will give WP8 a good look, I like it. But in my case I also don't mind iOS or Android either.
In my opinion they should all look quite a bit at the WebOS interface, and in the case of WP7 specifically at the "card" multitasking, of which their current program selection screen in an almost comically weak and neutered replication. On the other hand Live tiles are great, and Apple should be embarrassed they haven't bothered to at least have the weather icon update instead of showing a canned image. It looked a little lame even in 2007, but now it just seems like a stubborn unwillingness to accept any innovation outside the company's walls. Another major point in WP7's favor is battery life. It is up there with the best of them even on first gen phones like mine. While seemingly simple, it's something even a company with the resources of HP couldn't get out of WebOS and unlike many of the items on this list it really is a deal breaker for most people. Even the original battery in my Quantum makes it well past a day with regular use no problem.
In the end for whatever the reason WP7 isn't taking off the way MS intended it to, and to point fingers at other companies for their specific faults ignores the fact that as you argue in your post- not all limitations are really that important to many people. It certainly can be argued based on sales data alone that perhaps the ones facing WP7 are of the variety that people might actually be bothered by, especially if they are not a new smartphone buyer. Or it could be one of a myriad of other reasons. That being said, MS isn't exactly beleaguered Palm, and they know how to sell things as well as Apple does (just to different markets). So if their crack sales people can't get companies who used WinMo, have their entire company on Windows PCs, and spend tons on MS products annually to support them, clearly something is wrong. I'm not a typical MS customer though, so I have not a clue what it is. But companies don't just ditch a long term vendor, for a new entrant (applies to both Apple and Google in mobile) unless they are really confident in the switch.
arrogant inbred morons. every day an American says something, proves this beyond a shadow of a doubt.
Give me a hundred bucks, I'll buy one. That's way less than 450.