Nokia smartphones “too expensive” says Telefónica handset chief

Nokia’s high end smartphones are “too expensive” according to the European general manager for devices at international carrier Telefónica. Simon Lee-Smith told Telecoms.com that Nokia’s premium devices are “not yet at the right price point,” adding: “If Nokia wants to sell in volume, they need to bring out devices which are cost-competitive.”

Lee-Smith said Nokia was “beginning to listen” to its carrier customers and that he expected the Finnish vendor to deliver devices in the new year that are “more commercially effective”. He said the problem related to products that have been available for some time, such as the N8 and N9, as well as the recently announced Lumia800, Nokia’s new flagship WP7-based smartphone.

At Nokia World last month Nokia CEO Stephen Elop said that the Lumia 800 would retail for €420, pre-tax and pre-subsidy.

The vendor also used Nokia World to unveil a rejuvenated emerging market proposition based around feature phones heavy on functionality but low on price. “I hope they’re successful with that,” Lee-Smith said. “They need to be able to subsidise their high end smartphones, because they’re too expensive.”

Device vendors generally have unrealistic expectations of what carriers and consumers will pay for smartphones, Lee-Smith said. “All device manufacturers seem to think that a €400-plus device is the norm. Well, it isn’t. Customers and operators won’t pay that cost for a device which doesn’t differentiate sufficiently.”

Simply improving the specifications of smartphones is not sufficient, he added, saying that operators in general, and Telefónica in particular, won’t pay premiums simply because vendors are delivering phones with bigger screens or higher resolution cameras. “Let’s not let the technology and cost curve ahead of the demand curve,” he said.