Nokia’s $26 Feature Phones Earn Same Profit Margin As Lumia Smartphones

Nokia’s 105 feature phone earns approximately the same profit margins as the higher end Nokia Lumia smartphone line.

Speaking about his company’s pricing decisions, Nokia’s China Platform and Technology R&D director Jun Wang explained that the company plans to ship a massive number of the Nokia 105 devices.

The Nokia 105 is targeting the Chinese cellular market where more than 60 percent of all devices are sold for under $300.

Nokia realized early on that it was one of the few providers who could develop smartphone for less than $50. The company began creating the low cost cell phones in an attempt target the 2.7 billion people in the world who still do not have mobile phone service.

The struggling cellular company appears to be turning around its fortunes. Nokia officials released the company’s Q1 2013 financials and reported only a small net loss of just $150 million. The company’s smaller net losses were due in large part to increasing Nokia Lumia sales and the company’s full-scale restructuring. Nokia has been consolidating offices, shutting down production facilities and laying off thousands of workers.

Nokia reported 5.6 million Nokia Lumia device sales in the last quarter. Nokia is one of the few smartphone manufacturers to find any success with the Windows Phone OS.

Nokia’s biggest cash cow is still its 100-series feature phones. Nokia has sold more than 200 million of its lower end devices, and it expects those numbers to rapidly increase in emerging markets.

Do you think Nokia can turn around its fortunes by increasing Lumia sales while focusing on cheaper feature phones in emerging markets?