Nokia hopes Lumia 900 price cut will spur sales

One of Nokia's flagship Windows Phone-powered smartphones will see its price cut by half. The phone giant maintains the move is a "normal strategy."

Nokia Lumia 900
Josh Miller/CNET

The price of Nokia's Lumia 900 has been slashed by half in the U.S as the company attempts to lure in customers with heavy discounting.

AT&T released new pricing for the phone, cutting the cost of the Lumia 900 from $99 to $49.99 . AT&T sells the smartphone exclusively in the U.S.

The Lumia 900 was first launched at the Consumer Electronics Show in January. It was a follow-up to some of the first devices launched following the partnership between Nokia and Microsoft to bring the Windows Phone operating system to Nokia hardware.

AT&T said at the time that the launch of the Lumia would be a "notch above anything we've ever done," including the iPhone's launch.

Launched in the U.S. only three months ago, the smartphone was rendered obsolete last month by the announcement of Windows Phone 8 -- Microsoft's forthcoming mobile operating system -- which the Lumia 900 will not be able to run .

The handset's fortunes had earlier sufferd a blow when, within days of its debut, it was hit by a software data bug that saw some customers lose connectivity, and ultimately saw Nokia handing over $100 in AT&T credit -- cancelling out the price of the handset altogether -- to apologize for the fault.

Meanwhile, Nokia saw "mixed sales" in Europe during the first quarter. And uptake in the U.S. has been slow.

Nokia maintains the price cut is a "normal strategy," despite the company's ailing finances, according to Reuters.

The Lumia 900 is competing with several other phones -- other than the iPhone -- that have hit the market, including HTC's One X, Samsung's Galaxy S III, and the $99 Sony Xperia Ion.

Recent Nielsen data suggests Nokia has captured 0.3 percent of the smartphone market with its Windows Phone 7 devices, compared to Samsung's and HTC's respective 0.5 percent, while ComScore figures show a slightly more optimistic 4 percent of the overall smartphone platform.

Nokia's shares dropped to a 16-year low this month following the former phone giant's move to cut 10,000 jobs worldwide. The Finnish phone maker will announce its second-quarter results this week.

Update at 5:11 a.m. PT: More details have been added.

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