Nokia Cuts U.S. Price of Flagship Phone in Half

I still remember being in Espoo in late 2006 showing a prototype of an unamed touch screen (revolutionary) smartphone concept - the gentleman from Nokia (a very high ranking VP of Marketing) looked at the device and said 'phones will always have a keyboard'. 
That explains a lot ....

[Reporduced from the Wall Street Journal]
Nokia Cuts U.S. Price of Flagship Phone in Half
By JOHN D. STOLL

The price of Nokia Corp.'s NOK -2.13% flagship Lumia 900 Windows phone has been cut in half in the critical U.S. market, a little more than three months after the launch of the smartphone at AT&T Inc. T +1.38% stores.

The Lumia 900 hit the market at AT&T stores in April and the device had been priced at $99 with a two-year agreement, but a new price of $49.99 was introduced early Sunday.
The price cut comes as Nokia's smartphone performance is under significant scrutiny given the financial woes the Finnish company has encountered because of market-share losses and pressure on margins.

The Lumia 900's launch has been viewed by analysts as being lackluster.

Nokia Chief Executive Stephen Elop last month announced further downsizing moves, including 10,000 job reductions and a streamlining of research and development efforts.

"This move is a normal strategy that is put in place during the life cycle of most phones," Nokia spokesman Doug Dawson said in an email. It "allows a broader consumer base to buy this flagship device at a more accessible price."

Price reductions aren't uncommon in the U.S. market, in which carriers like AT&T subsidize the cost of the phone as long as a customer signs a contract. The actual cost of the phone to AT&T isn't public and it is unclear how both companies—Nokia and AT&T—will pay for the new price cut.

Mr. Dawson noted Samsung Electronics Co.'s 005930.SE +4.40% Galaxy IIS at AT&T, which debuted about six months before the Nokia Lumia 900, was on the market for roughly the same period of time as the Lumia 900 before a $50 price drop was implemented.

Nokia's Lumia phones took a hit a few weeks ago when it became apparent that current versions of the phone wouldn't be eligible for an upgrade to Microsoft Corp.'s MSFT +2.65% new Windows 8 software later this year. Nokia has said the Lumia phones will, however, get significant upgrades even if Windows 8 upgrades won't be available.

The move comes following a Lumia 900 launch that has been viewed by analysts as being lackluster. That has tarnished the high-profile relationship between Nokia and Microsoft, which teamed up to launch a portfolio of Windows phones to better take on Apple Inc.'s AAPL +1.01% iPhone software and Google Inc.'s GOOG +1.06% Android system.

Nokia has weathered a punishing decline in its share price even with the Lumia 900 on sale: The stock has fallen 64% since the April 8 launch of the smartphone. The drop partially reflects the uncertainty with which investors have viewed the Lumia lineup, which replaced other smartphones that were regarded as outdated.

Nokia's stock touched a 17-year low last week and ended down 2.5% at €1.51 ($1.85) in Helsinki trading Friday. Its market capitalization of about €5.6 billion, or roughly $6.86 billion, represents a more than 95% decline from its peak days during the information-technology boom at the turn of the century.

The struggling handset maker's market capitalization is now lower than the $8.5 billion Microsoft paid for Internet phone company Skype Ltd. last year. Nokia is valued at roughly half of Apple's latest quarterly net profit.