With its $50 price tag, Nokia (NOK, quote) is looking to increase its share of the smartphone market with the Lumia 710. The first Windows phone device from Nokia, it runs on the Microsoft (MSFT, quote) Windows Phone operating system.
According to an article in The Wall Street Journal by Walter S. Mossberg, “Talk is Cheap and Reliable on Nokia’s $50 Phone,” the Nokia Lumia 710 was “designed to be a low-cost alternative to most other smartphones, to boost the tepid sales of WIndows Phone.”
The Nokia Lumia 710 is being carried in T-Mobile stores, which is still owned by Deutsche Telekom (DTEGY, quote) after the failed sale to AT&T (T, quote).
As detailed in previous articles on www.emergingmoney.com, something needs to work for Nokia — and very soon. Over the last year, the share price of Nokia has fallen more than 40%. On a quarterly basis, both sales growth and earnings growth are down significantly.
The price-to-earnings growth ratio, for which a 1 is considered adequate, is over 6 for Nokia. (The lower the number here, the better.)
According to Mossberg in his Wall Street Journal piece, “After a week of testing the Lumia 710, my verdict is that it’s a good value for the money, and a good choice for people moving up to their first smartphone, or those looking for an alternative to Android and Apple.”
While this will have an appeal for consumers in emerging ecomonies in Asia, Africa and Latin America, the big question for Nokia now, and for its shareholders, is will the Lumia 710 be good enough for it to regain market share against far more desirable products.