How To Boost Your Handset Margins

3109.jpgFor the past several quarters, analysts have kept close watch on Nokia’s handset margins and their average selling prices, as they get squeezed by the huge amounts of low-cost devices the company sells in emerging markets. The company’s effectively managed these concerns thus far, thanks to its economies of scale and other factors. Still, higher margins is always a good thing — so how do you boost them?

Take a handset you’ve developed for emerging markets, swap out a few features, then release it as a “classic” voice-centric device for established, higher-income markets. Then watch A-list bloggers fawn all over it as the answer to their “yearning for a simple phone” (even though the US has been the dumping ground for plenty of simple Nokia devices for quite some time).

Pretty shrewd, really. Announced price of the Nokia 2630, a device for emerging markets that also happens to be Nokia’s thinnest: 90 euros. Cost of the 3109 classic, intended for higher-income markets (and which ditches the 2630’s camera, but adds USB connectivity and microSD memory): 140 euros. Perhaps in the excitement over such a simple, straightforward device, nobody will even notice that it offers two hours less talktime than the emerging-markets phone…

—–>Follow us on Twitter too: @russellbuckley and @caaarlo