We previously published our investment analysis series on how mobile carriers benefit from carrying the iOS enabled mobile communication devices from Apple Inc. (AAPL), the worldwide (profit) leader in the mobile communication devices industry.
On August 9, we analyzed and evaluated Apple’s bold move to match the $50 price cut on its iPhone 4S devices at its Apple Stores in response to Sprint’s (S) unilateral $50 price cut on iPhone 4S devices sold through Sprint. We were pleased to see that Apple was willing to sacrifice margin in order to potentially boost its sales of iPhone 4S devices, especially because Samsung (SSNLF.PK) has opened up a commanding lead in terms of smartphone sales during the most recent quarter. While we believe that a number of people were putting off the purchase of an iPhone 4 or 4S due to the iPhone 5 being launched in September, we were glad to see that Apple wasn’t going to stand idly by and that it was willing to make tactical pricing decisions.
Apple’s recent price cut was in a significantly different context than Nokia’s (NOK) $50 price cut in July. Nokia and AT&T (T) announced a $50 price cut on the Nokia Lumia 900 Windows Phone Smartphones at AT&T three months after a widely anticipated and celebrated product launch. Then again, when Nokia only sells about 250K (according to Sanford C. Bernstein analyst Pierre Ferragu) of its Lumia POS smartphones at AT&T, we think that $50 price cuts are too moderate a price move. We think that the estimated 250K Lumia unit sales at AT&T is pretty disappointing, especially when Nokia had development support from Microsoft (MSFT) in making the Windows Phone and marketing support from AT&T.
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