The Register reports sales of Nokia's Windows Phones are doing really poor. With roughly 330,000 Lumias sold in the US and the biggest-ever advertising blitz for a phone yet ($150 million), the site calculates Nokia spend $450 in marketing to make someone buy a $99 (now $49) phone.
The Lumia 900 sold for $99 up front, allowing AT&T to claw back up to $32m of its marketing costs, although for some of this period the cost was slashed to zero. And naturally, the carrier will amortise the marketing cost over a longer period than just three months. However AT&T slashed the $99 to $49 at the weekend.
When operators invest heavily in promotion they expect some return. Samsung shifted some 25 million units of its first Galaxy phone worldwide and last year’s successor is likely to exceed that. Continuing heavy promotion on a niche ecosystems represents a significant opportunity cost.