Phone makers to cut handset price
This must be a very good news for us! We all know that Motorola empire is falling deeper and deeper. But still, there are about 9-11% customers that still loyal to the American phone maker. It is quite large of number, since in global number, it counts to more than dozen million handsets.
What strategy will other phone makers do to steal Motorola’s market? Global leader, Nokia, seems will take direct head-to-head action. They plan to cut the price of their selected mobile device up to 20%! As they aim for big Motorola market in US, China, and India, I think it is a very clever idea. Who wants to buy Motorola product if we can get similar quality in Nokia phone collection with lower price?
If Nokia cut their price, what will happen to other manufacturers? This action must be a shocking therapy. If the market leader cut the price, like it or not they need to follow. As it happens to Korean manufacturer, LG. They will follow the price-cut policy as soon as Nokia announces their decision.
They realize that if they sell their products higher than Nokia, people will choose the lower price tag one. Market is currently very sensitive to the price factor, especially when other major need like gasoline and food commodities price is getting higher everyday.
Nam Yong, CEO and Vice Chairman of LG Electronics said, “Price competition is inevitable unless we can create a unique value to differentiate (our products) from Nokia’s.” Even the CEO admitted that Nokia is really hard to beat.
Last quarter, LG enjoyed significant result of global sales. They are now number 4 in market share, in front of Japan-Sweden manufacturer, Sony Ericsson. LG is still focusing on premium market. After conquer that niche, they will soon play in low-end market.
Source: AFP
May 28th, 2008 at 2:36 pm
“This must be a very good news for us!”
This is a gift from Nokia!