The Lumia 1020’s subsidized pricing is either genius or self-delusion


Pre-orders for the Nokia Lumia 1020 have begun. After all the waiting, the opportunity has finally arrived to get your hands on the smartphone with the best camera performance to date. I’ve been eagerly anticipating this event, because as far as I’m concerned, the days and weeks that follow are going to go a long way towards dictating the ultimate fate of Windows Phone: basically, that if something as awesome as the 1020 can’t be a hit, Microsoft may as well throw in the towel.

Since I’m placing so much importance on 1020 sales performance, it shouldn’t come as much of a surprise that the announcement of the phone’s $300 on-contract price tag nearly made me do a double-take; you actually WANT to sell this phone, right, Nokia?

But mulling that $300 figure over for a few more days, I’m less certain than ever of how to react to it. Either my fears will be justified, and that high price is going to absolutely obliterate any chance the 1020 had of being Windows Phone’s savior, or a premium price is a really smart way to get shoppers to recognize the 1020’s superior quality.

Too Much: No Sale

Let’s get one thing out of the way here: I’m not concerned with the 1020’s full sticker price, what it’s selling for in other markets, nor the fact that many smartphone buyers don’t get their phones with subsidized prices. The US market is absolutely key to Windows Phone’s survival, and shoppers here look at subsidized prices and subsidized prices alone. We can talk about international sales some other time.

1020-attFor so long, it seemed like the industry had settled on $200 as being the target subsidized price for the launch of a new higher-end smartphone. Sure, there were exceptions, and you might pay more for a version of a phone with a ton of flash storage, but $200 was the gold standard. I can’t say precisely when things started changing, but the original Galaxy Note marked the first time I took notice of a smartphone launching with a base $300 price.

We’ve seen the figure return more and more since then, and there’s usually a good way for us to rationalize that price: with the Note, that larger screen and S Pen gave shoppers a reason to pay extra. That seems to be the same assessment Nokia is hoping 1020 shoppers make, with the beefy camera worth an extra $100.

There are more than a few problems with that, though. The big one, as far as I’m concerned, is Windows Phone. It’s naïve to expect customers to compare Windows Phone and Android devices on an even playing field, and for those oh-so-important converts that WP needs to make, it needs to offer as many incentives as possible. The 1020’s camera could have been a huge carrot to dangle in front of undecided consumers, but the phone’s premium price may very well cancel that right out.

I think we should also consider that there aren’t currently any $200 Windows Phone models in AT&T’s stable. Not having any there to help soften the blow of the 1020 is only going to make its price look even less attractive. Sure, the phone’s camera may be killer, but does that make it worth paying three times as much as you would for a Lumia 920?

Set The Price You Think You Deserve

1020-smallThere’s a flip side to all my nay-saying about the 1020’s price. As a group, we consumers aren’t always the sharpest lightbulbs in the box (and we have a tendency towards catachresis), and if someone tells us something costs $300 enough times, eventually we might start seeing it actually being worth $300.

I don’t think this is any more true than with Apple, which has right from the start taken strict control over the pricing of its iOS products. Both the $200 32GB HTC One and $300 32GB iPhone 5 may be really nice handsets, but Apple has done a lot of work to make sure we don’t balk at the $100 premium its phone demands.

Could this really be what Nokia’s doing? If so, it’s taking an enormous gamble. Sure, the 1020 has received great press, and I can’t remember a Windows Phone device that’s been more eagerly anticipated, but once you get past this camera business, it’s still in many significant ways the same basic hardware we saw launch back in the fall of last year.

The thing is, if that is what Nokia’s up to, I haven’t seen the evidence to support it just yet. It would need a Samsung-caliber promotional campaign, and the absence of such a thing so far may mean it’s already too late.

In the end, we’re going to have a wait on our hands before we’re able to get a solid read on the phone’s arrival. I’ve got a very bad feeling about the 1020’s fate, but it hasn’t even reached customer hands yet, and I could easily be getting ahead of myself. We’ll have a better sense in another couple months, but in the meantime, quickly knocking $50 off that 1020 sticker sure could help.

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About The Author
Stephen Schenck
Stephen has been writing about electronics since 2008, which only serves to frustrate him that he waited so long to combine his love of gadgets and his degree in writing. In his spare time, he collects console and arcade game hardware, is a motorcycle enthusiast, and enjoys trapping blue crabs. Stephen's first mobile device was a 624 MHz Dell Axim X30, which he's convinced is still a viable platform. Stephen longs for a market where phones are sold independently of service, and bandwidth is cheap and plentiful; he's not holding his breath. In the meantime, he devours smartphone news and tries to sort out the juicy bits Read more about Stephen Schenck!