Nokia’s Smartphones Struggle To Keep Up With iPhone Despite Lower Profit Margins

A recent publication by Wall Street Journal reveals challenges faced by Nokia as it struggles to compete in the cutthroat smartphone marketplace. The report points out that Nokia’s Lumia 900 sells for $200 less than the cheapest iPhone 4S, even though the Finnish cellphone maker actually pays more for its phone’s components than the Cupertino giant.

According to the source:

The components of the Nokia Lumia 900, which sells for $450 without a phone contract, uses $209 worth of parts, according to research firm IHS iSuppli. Meanwhile, the comparable 16-gigabyte iPhone 4S, sold for $649 without a phone contract, is made of components that cost $190, iSuppli says.

Nokia’s top-of-the-range Lumia 900 costs $200 less than the cheapest iPhone 4S. But Nokia pays more for the parts. Ben Rooney in London explains how big a problem this is for Nokia.

The findings indicate Apple makes nearly twice as much on iPhone sales as Nokia does on the Lumia 900, excluding costs like manufacturing, marketing and distribution.

The report suggests that the low profit margins could actually be a big problem for Nokia, a company who is currently betting on a new line of devices running Microsoft’s latest Windows mobile software in an effort to compete with Apple and leading manufacturers of android smartphones.