Is the Inexpensive Nokia 105 the Most Profitable Cell phone for Nokia?

Wayne Bond July 9, 2013 0


It feels like cell phones are often used as a secondary handset device alongside our smartphones. Nokia still manages to make a huge profit of them, selling its Nokia 105 for $20. This phone is usually compared to a scientific calculator but as we can see, retail stores are still selling it. It’s the most basic phone you could find today, in the era of smartphones. It doesn’t feature fancy options like smartphones do, neither has an app store for downloads. Customers know that $20 for a cell phone that can send SMS, make calls and has a color screen is more than a great idea.

It can’t even surf the web and doesn’t have a camera, but this doesn’t stop the selling process. According to an analysis by IHS, Nokia profits only $5.80 of each phone. The remaining part, $14.20 per device, goes for manufacturing and materials. A phone with same basic features has cost 4 times as much as 10 years ago and now we can buy it for only 20 dollars. Wayne Lam, IHS analyst, said that with keeping the same features for a decade now, this Nokia 105 can integrate all functions into one chip while reducing the production cost.

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Nokia 105’s profit is much lower than all high-end smartphones manufactured by the bigger companies. We must note that the retail price of this phone is approximately 30 times lower than the retail price of smartphones. The cell phone can’t be put in the same room with smartphone offerings, but it’s worth mentioning that its battery offers a 12.5h talk time and 35h on standby. This factor makes the phone successful in markets like Latin America, Africa and India.

Emerging markets are the main target for Nokia with this cell phone mode. If you look at the numbers, you will see that Nokia’s new strategy is targeting these markets with low-cost phones. Its budget phones noted 90% of all shipments by Nokia in 2012. According to Lam, Nokia takes advantage with its cell phones while every other market is focused on smartphones. Low-cost simple phones are still very important for Nokia.

This phone offers a clock, FM radio, 5 games, flashlight, SMS service, movie times and local news. Nokia has mentioned that this Nokia Life service is like having the whole Internet close to your fingertips.

If you are searching for a phone that you will use only to make calls or send SMS, Nokia 105 is cheap and perfect handset for that purpose.

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