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Free Lumia 900 offer ends April 21

$100 discount on phone seen as way to grab market share

April 12, 2012 04:14 PM ET

Computerworld - Nokia's Lumia 900 won't be free much longer. A $100 discount being offered on the $99.99 smartphone (with two-year service contract required) will expire at the end of business on April 21, Nokia confirmed Thursday.

Store clerks for AT&T have been offering the $100 discount, which can be applied to monthly service fees, even though store signs indicate the phone costs $99.99. A similar discount has been offered via Web purchases, but not until checkout.

The $100 discount will expire the night before AT&T offers a white Lumia 900 in addition to the two current versions in cyan and black, Nokia and AT&T said.

Nokia, AT&T and Microsoft have not discussed how many of the new Lumia 900s have sold, but a Nokia spokesman said, "We've been pleased by the reaction and buzz around the phone so far."

Microsoft issued a similar statement noting Nokia 900 has recently topped Amazon's cellphone best sellers list. Amazon offers it for $49.99 on AT&T, which first began in-store sales on April 8. "We're more excited than ever about the future of the Windows Phone platform," a Microsoft spokeswoman said.

The low price and the free promotion "are really an indication of how aggressive the smartphone market is becoming," Maribel Lopez, an analyst at Lopez Research, said in an email. "The price point for that phone is meant to buy [market] share."

The $99.99 price tag is well below the $209 it costs for materials in each phone, according to an IHS iSuppli in a teardown report. The $209 is, however, 46% of Lumia's $450 retail price with no contract.

Indeed, some analysts see the Lumia 900's success as integral to Nokia's success in the U.S. and to the fate of Windows Phone as an alternative to Android and iOS.

Forrester Research analyst Sarah Rotman Epps said Nokia and Microsoft need to convert BlackBerry users to Windows Phone, and confessed her personal love of Windows Phone, which she has used on three models, including the Lumia 900.

Epps said that Nokia and Microsoft are clearly helping AT&T with an attractive profit margin to encourage AT&T reps and store managers to sell the device. At one AT&T store in Virginia, a store rep said he had sold some Lumia 900s, and noted he was given one of the units three weeks before it went on sale to gain familiarity with it, something that rarely happens with new phones.

The rep also said Lumia 900 units were given to other store agents, and he pointed out the front-of-store display about the Lumia 900 and other Windows Phones. The displays are commonplace in other AT&T stores.



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