HELSINKI (Reuters) - Carphone Warehouse CPW.L has slashed more than a third off the price of Nokia's NOK1V.HE first phone model with an unlimited music bundle, for which analysts blamed lacklustre demand.
Carphone and Nokia said the sharp price cut was part of normal price changes after the Christmas sales period.
Carphone, the sole retailer of Nokia’s pre-paid bundles in the UK, its only market so far, cut the price for the Nokia 5310 with music bundle to 82.18 pounds from 127.10 pounds as part of its wider sales campaign, a Carphone spokeswoman said.
Analysts, however, said demand had been weak and the company had had problems explaining its offering to consumers.
“Nokia is experiencing lacklustre sales of its ‘Comes with Music’ in the United Kingdom,” said Paolo Pescatore, analyst with CCS Insight.
The music industry had hoped Nokia’s “Comes with Music” phones and music service, and similar packages from other hardware vendors, would help make up for falling CD sales and cut illegal downloads.
Last October, Nokia launched the service in Britain -- the acid test market for new mobile services in Europe -- with the sleek, but relatively old, model 5310. It expects to roll it out in many key markets, including the United States, this year.
“Comes With Music” offers unlimited music from the four major music labels and many independents, and the music can be kept after the yearly contract has expired.
The individual tracks can be downloaded to phone and a single computer and are free, though the cost of the music is reflected in the price of the phone itself.
“The extra value is in the music library -- but that’s a very abstract thing to sell. I strongly believe the early Comes With Music devices should have been sexier; they should have been eye-catching, svelte models signalling an exciting new service,” said Global Crown Capital analyst Tero Kuittinen.
“The 5310 is a dumpy little Honda, not the exotic Maserati it should have been,” Kuittinen said.
Additional reporting by Kate Holton in London; editing by Will Waterman
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