Smartphones running on Microsoft platform will soon become among the most widely affordable cutting-edge phones with prices seen dropping fast, according to Nokia chief executive Stephen Elop.
In a meeting with Helsinki-based business journalists Friday, Elop said the recent Nokia-Microsoft deal involved discussions about bringing down the cost of phones.
Nokia is currently the world’s largest phone maker by volume but has not been figuring out well in the smartphone war since its Symbiam platform is biting the dust left by Apple and Google’s Android.
Acceding that it can’t win in the fast growing mobile communications war if it won’t position itself in the smartphone race, the Finnish cellphone maker has partnered with Microsoft Corp in a bid to power its smartphone models with features that make it highly competitive.
The Nokia chief said among the key issues taken during the Nokia-Microsoft talks was convincing Nokia that it could reach “a very low price point.”
“We have become convinced that we can do that very quickly,” Elop said.
But some analysts expressed doubts whether Nokia could afford to succumb immediately to smartphone’s lower price threshold because it has yet to prove it can cut into the market.
On the other hand, Microsoft’s bid to compete with Apple’s iPhone has been met with tight hardware requirements for phones running its software, thus keeping handset prices up and limiting its chances in seizing the market.
Nokia shares fell sharply 14 percent on apprehensions the largest cellphone maker’s decision to join the smartphone war might knock down margins and weaken its position while missing out on the transition.
But Elop said Nokia is determined to put up a strong showing in the ongoing smartphone war, as industry experts noted the new alliance will be good for competition and innovation.
Elop said the final agreement between Nokia and Microsoft would be firmed up through an agreement signing slated in the next few months.
“The conclusion of the agreement will happen, we think, quite quickly, measured in a couple of months, it may be a bit longer, it may be shorter,” he said.