Nokia charging less money after paying for more expensive components inside Lumia smartphones

In its struggle to compete with current smartphone market leaders, it turns out Nokia has had to drastically reduce its profit margins for the sake of fitting better hardware inside less expensive phones to attract more users. Currently, the flagship Nokia Lumia 900 sells for a full $200 less than the Apple iPhone 4S and yet actually costs Nokia almost $30 more to make. That means Nokia pays more money for each unit of the Lumia 900 than Apple pays for each unit of the iPhone 4S, yet takes in less money as profit after a unit gets sold in the market.

According to information from iSuppli, Apple spends about $190 on every iPhone 4S sold while taking in $459 as profit. Meanwhile, Nokia spends $209 per Lumia 900 sold with only $241 in profits. This is quite alarming if you think about it. One company has to put up with greater losses just to get on the same level as the current market leaders, while the other company practically enjoys unfair (but deserved) privileges that work to reduce total component costs while further increasing profit margins.
It’s going to be interesting to see what happens when Nokia finally manages to turn its luck back around and regains its market leadership crown. Nokia has got a good thing going with Windows Phone 7.5 Mango and even on previous flagship devices like the Nokia Lumia 800, you can see the software shine. With that said, however, with the ways things are going right now, it’s hard to say how exactly they are going to pull that off.