Nokia Upbeat on Phone Prices

The RED HERRING picks up on the story of Nokia's improved average selling prices for handsets in Q1. AS noted, "the average selling price for its devices during the quarter was €103 (about $125), compared to a previous estimate of below €99 ($120)."

Some analysts believed the that "the increase in the average selling price was the fact that the proportion of cheaper models sold during the quarter was lower than expected," and meant Nokia's competition was gaining share in the low-end market.

Lauri Rosendahl at the Carnegie Group disagreed and said, "For me the announcement is not an indication of that. If that is the case, Nokia should have provided more information."

Rosendahl pointed out that "he did not make too much of the average selling price announcement since prices have typically tended to increase in the beginning of the year." He opined that maybe the increase might mean the "rapid sales growth in Asia could be cooling off as that’s where the company sells many of its cheaper phones." He said, "The news demonstrates that the huge sales growth in Asia is now slowing down."

Rosendahl noted that "despite the fact that average selling prices went up on a quarterly basis, year-over-year, they declined 7 percent."