Think about the Design and LABOUR cost. Cost Millions to research on the market, Millions to hire a team to write maemo 5, millions to design the board, millions to marketing the device. Think about those then its a very cheap price..

Think if you try to make one yourself. Can you make it at that cost? I don't think you can make the logic board nor placing the CPU at the most efficient area on the board to make it processing faster. Its look easy but it is quite hard to make unless you test it out with engineer first.

Number One: Nokia don't wanna sell too many N900. In fact I'm sure they feel they are selling too much of them. I'm quite sure nobody smiles in Nokia when they see N900 at the top of the list. Reason? They are not ready yet to make Maemo their main OS. Number two: Pure mathematics. Supose integration of N900 costs 100 Euros. Supose they sell it by 200. Ok. Other expenses (marketing, shop channel, relationship with distributors, trips,...) cost 80 Euros. So they make 20 Euros for every unit sold.

See the mathematics here? Imagine the price of 600 Euros. Margin? 420 per Unit. That is 21 times more.

So they have the same margin selling 10 milion units at the actual price that selling 210 milion at a cheaper price.

And the point here is: They are going to sell it anyway for 200 Euros. Don't worry. They simply are not going to do it now. They'll do it in a year or so, so their return will triple or quadruple.

When they'll have the first milion that buys for 600 they'll move down to 500. Then 400 and so on.

All steps slow enough so you say "ok, I buy it!!" just before another price cut.

Finally, in Nokia favour, you must think they are not the only ones playing this game. Everybody is and mostly their own supliers surely play the same game with them.

I'm sure last generation chips and memory follow the same price phylosophy even for Nokia.

Nokia is surely paying much more for 32GB memory now that what they'll pay next year. And that is simply becouse major players of the market decided not to put too much of them out there, so Sony, Nokia, Apple and whoever wanna have a high end device out there pays them what they want to.

Cost of unit alone does not solely represent hardware cost. This is the most basic of economics, attributed to all markets. Did you see the recent supposed article surrounding the Modern Warfare 2 budget?

$200 million;
- $50 million to create
- $150 million for production / marketing.

so maemo 5 was free to nokia? what about designing the device?

Just keep in mind that the price of a product is a function of market forces, and that it doesn't depend on costs.

Costs matter when contemplating profitability.

this discussion leads nowhere i guess, the point is a iphone 3gs costs nearly the same price and nobody says ohh iphone is too expensive they sold millons of devices and a they have contracts with tmobile vodafone etc so the ppls have to pay a lot more over the months with there mobile bills.

Sure 600 euro especially in Europe is a big big price also for me.. i never spend that much money into a "handy"

I also ask myselfe sometimes why is it in the USA 500$ and here in Europe 600Eur. Thats not fair the devices should have close the same price Nokia is a european firm so taxes should be the same like inner europe for other stuff from france for example.

But iam hopefully that the N900 will fulfill what i await to get and that with a some more development all the bugs will be history. And i will use it over a long time.

best regards Crown

I disagree with many of the above posters for the following reasons:

1. Times have changed. It took only two years for a totally new entrant to the smartphone market to shook it up.
Yes, it is Apple, the arch-enemy of every major smartphone maker. It was a bankrupt company and now it could buy Nokia twice over.
It is time for Nokia to take some tricks out of the Apple playbook.

2. Ignoring North America is a HUGE mistake. Nokia cannot possibly leave such a lucrative market out of its strategic planning.
Since we've established that the profit on the N900 is very high, what prevents Nokia from dropping the bomb in NA and selling
the N900 for $250? It would still make profit for sure. Imagine the reaction of people here: wow, gee, look at this awesome cool
device. It only costs $250 without contract. Nokia could sell 1 million N900 in a month.

3. And I disagree with a previous poster's argument that the goal is not to sell many devices, but less at a higher profit margin.
While Appple seems to be doing it successfully - for now it will have to adapt its strategy too. Ultimately as the sector moves
away from the selling-hardware model towards the service-oriented approach (like Ovi or the App store) it is clear that
to gain marketshare in the services one needs to produce an inexpensive platform. Just watch Google. It will come out with its
own phone, then drop its price ridiculously, then eventually it's gonna be for free.

4. While I truly wish for Nokia's global success I don't think that the N900 will be a popular device for the masses. How sad it is.
Maybe the upcoming N9x0? There is simply no time to play catch-up anymore. Com'on Nokia, step ap the ante and use your massive
global talent pool and come out with something truly revolutionary.

"2. Ignoring North America is a HUGE mistake. Nokia cannot possibly leave such a lucrative market out of its strategic planning.
Since we've established that the profit on the N900 is very high, what prevents Nokia from dropping the bomb in NA and selling
the N900 for $250? It would still make profit for sure. Imagine the reaction of people here: wow, gee, look at this awesome cool
device. It only costs $250 without contract. Nokia could sell 1 million N900 in a month"

I'm sure Nokia is not crazy enough to do this. Who is going to buy other Nokia model if they dump N900 for 250$ without contract?

Your knowledge about the global industry is very shallow and US centric. You made some false assumptions and blanket inferences that paint a totally different picture from the truth.

Apple has done nothing unique except in the US, whereby they struck a deal with a carrier to cover and control all advertising production costs, and gave exclusivity and a share in the profits of the appplications in exchange for an unheard of $400 subsidy, which has been the key to its success.

News reports are just reports. Ask the manufacturers, and you'd know the big "arch enemies" in the mobile computing space are Nokia, Samsung, and RIM. These three run the industry with unrivaled scale. Apple is creeping into that fray, but must also deal with WinMo and Android first. I don't think that will be easy, especially with carriers ending iPhone exclusivity deals. Once the subsidy gravy train ends, and the iPhone goes from $199 on contract to $359, other devices with better feature sets will look more attractive, right when the US market is becoming more savvy and mature, and their expectations for devices in that price point increase.

Nokia doesn't need to copy Apple, since most Apple innovations in the phone space were done by Nokia first.
* Nokia had an on device application and service delivery system on its phones long ago. "Download" was ahead of its time, and a precursor to the Ovi Store.
* Nokia almost invented the "desktop view on a mobile", and is still the leader in that space to this day. Most Nokia smartphones and even some featurephones do Flash embedded objects.
* Nokia's 770, the original Maemo device, featured an icon based touch interface years before the iPhone.

So whar exactly did this small 1% of all phones device maker do so special?

"Ignoring"?!? Isn't it the carriers that are to blame? Nokia released the N97 in the US first. Same with the N900. Demand has been obviously high. Why are the carriers not willing to feed tha demand? And why is that Nokia's fault? Nokia has a massive business presence in the US, with research labs as well. But the carriers keep them on the sidelines. The 5800 XM was the best iPhonesque device to come out, and at an unsubsidized price far lower than what at&t pays to subsidized each iPhone. Had they offered half the subsidy offered for the iPhone, it could have had the most advaned smartphone for under $89 subsidized. But Nokia is at fault?

It is actually quite typical, and to be honest, most everyone paid around $450-550, far less than retail. Since the hardware is almost identical to the iPhone, only with a much more expensive camera sensor and optics, it probably cost more to make, so the profit margins may be relatively low...
Common sense and shareholders looking to increase profits keep your idea at the docks. Were the N900 not selling well, you'd have a point, but evidently they can't make enough of thee things. It is just a case of supply and demand with sound business planning.


We agree in this area. Do some research, and you'll see Nokia is already preparing technology to fully subsidize devices with embedded ad delivery systems. Harmattan will be tested with this feature, bringing free devices to the world if it works.

"Catch up"?!? Nokia owns 42% of the phone market to Apple's 1%. Nokia owns 37% of the smartphone market to Apple's 17%. Take off the media tinted glasses and wake up! And a pocketable desktop OS has indeed been done by OQO already, but not a finger controlled full Linux system. And no one has embedded a universal IM/SMS client that I know of. No one has implemented virtual memory (which is ironically something that debuted on the Apple Lisa PC, a famous technical marvel but commercially, an Apple failure) before on a mobile. Nor have they brought an application framework capable of integrating with native toolkits and spanning across 60% (and possibly more) of all smartphones and every desktop OS. Everyone has an app store, but only Ovi can potentially find its way onto any OS. This is what I call revolutionary. Research this market more closely a pay attention, because the real innovators live off results, economies of scale, and long term strategies. Apple has always failed in this regard, and looks o have marginalized itself again. Let' see what response they have when people demand support for Qt and the Qt powered Ovi Store in the next five years, IF they make it that far.

"Catch up"?!? Nokia owns 42% of the phone market to Apple's 1%. "

This was a typical Nokia fanboyish statement. With that 1% Apple made profits, outpaced everyone else, while Nokia with its 42% lost money and more than 5% market share (mostly to Apple). How would you explain that?