Is Nokia's Netbook Too Expensive?
On Sept. 2, Nokia announced the specs of its first netbook, the Nokia Booklet 3G. The netbook, which comes with a global positioning system and runs Nokia mobile services, will cost $819. Most analysts I’ve talked to expected it to cost less than $500, which is the price of premium netbooks today.
The same day, Nokia also announced some neat Facebook features.
The high price could dramatically impede Nokia’s progress in conquering the netbooks market. Nowadays, most manufacturers’ netbooks cost between $200 and $350 to the carriers, which subsidize and sell them for consumers for as little as zero dollars with a wireless service contract. But no carrier can afford to subsidize the Booklet’s full cost. Germany’s O2 plans to sell the Booklet to consumers for about $356, after subsidies and with a long-term wireless contact. That’s a lot of money for a consumer to shell out. And my hunch is, not many consumers will take O2 up on this offer.
Even though its product looks attractive and works well, according to demos, the high price leaves little hope for Nokia’s success in this market. While the company does not want to cheapen its brand, or jeopardize its margins with a cheap netbook, it has to come out with a competitively priced device to make sales. Today, in my opinion, Nokia prices itself right out of the market.