Nokia Corporation (NOK) Prices Lumia at a Premium – Really?

Nokia CorporationNokia Corporation (NYSE:NOK) has put itself behind the proverbial 8-ball in the smartphone market. First, it is already working with a large deficit in brand saturation, as Apple Inc. (NASDAQ:AAPL) iOS and Google Inc. (NASDAQ:GOOG) Android phones have seized a majority of the smartph0ne space over the last couple of years. In the meantime, Nokia Corporation (NOK) fell behind with its Symbian operating system, and its subsequent decision to dump that in favor of a relatively unproven mobile Windows OS from Microsoft Corporation (NASDAQ:MSFT).

And Nokia Corporation (NYSE:NOK) didn’t help matters when it “botched” its big Lumia unveiling in New York City earlier this month with virtually no mention of release dates, prices and/or carriers of the new flagship 820 and 920 smartphone models which are set to run the new Windows Phone 8 operating system by Microsoft Corporation (MSFT). This lack of information for consumers certainly hurt investors in Nokia Corporation (NYSE:NOK) stock –  including billionaire fund manager Paul Tudor Jones of Tudor Investment Corp., who put in a new stake of $1.6 million during the June quarter – because the stock price immediately plunged during and after the launch event. Not a good omen.

Finally, though, Nokia Corporation (NYSE:NOK) released some of that missing information – though it applies mainly to Europe, where the smatphones are due to hit store shelves in November, which is about in line with the expected launch of Windows Phone 8. The company also announced that it is working with virtually every major carrier in Europe to provide the phones, and said they would retail for about $650 for the 820 model and about $770 for the 920.

Nick Dillon, an analyst with tech research firm Ovum, said, “It does seem on the high side but then again these are early, pre-availability prices so we may actually see the actual price in the shops when it releases come down.” Considering the iPhone 5 is retailing for about $800 in Europe and the Galaxy SIII by Samsung Electronics Co. Ltd. is also around $770 while being in the market since May, and that the Nokia Corporation (NOK) Lumia phones are running an unproven mobile OS, Nokia may have to lower prices in order to compete.

However, Ben Wood of CSS Insight says there may not be much room for price lowering for Nokia Corporation (NYSE:NOK), citing several new technologies like larger screens, wireless charging and wireless data transfer. “I’m sure that Nokia is pricing its new Lumias as aggressively as it can, but at the same time it needs to maintain pricing integrity,” he said.

Whether the new technology will be enough to justify the price risk for consumers will be a vital question for the future health of Nokia Corporation (NYSE:NOK).