Thread: My prediction: Nokia Internet Tablet will falter in 2009 and beyond
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SD69 is offline SD69
2008-11-22 , 17:31
Posts: 1,513 | Thanked: 2,248 times | Joined on Mar 2006 @ US
#9
Originally Posted by benny1967 View Post
What you don't take into account is that the price is mainly determined by the consumer: if people are willing to pay €400,- for a product, why sell it for less even though the costs of manufacturing it are much lower?

So the fact that tablets are relatively expensive at the moment doesn't mean Nokia couldn't sell them for less once the situation on the market changes.
I don't think this applied to the NIT.

First, it was initially (if not still) a niche product with no market history, so it was difficult to implement the conventional what the market will bear approach.

Secondly, sales are not high and there are now other Internet-capable pocket sized devices on the market. Under the market demand theory, the price would now be lower than 400 but it is not.

Finally, Nokia is a fiscally conservative company. They don't accept loss leaders or bet on creating a niche or marketing hype strategies. Internally, the NIT product had to show a future that included a decent profit margin and modest sales. I think modest sales were unavoidable, so I think a good price/profit margin was used.