* Cuts N8, C7, E6 prices some 15 pct in Europe -source
* Analysts say price war could intensify
* Nokia says price cuts a normal part of business
* Shares fall 1.5 pct
(Updates shares, adds background, more comments)
By Tarmo Virki, European Technology Correspondent
HELSINKI, July 5 Struggling Nokia has
cut the prices of its smartphones in Europe , two
industry sources told Reuters on Tuesday, raising the
possibility of a more intensive price war in the mobile phone
Nokia's smartphones are rapidly losing market
share to phones running on Google's Android operating
platform, and the Finnish company is expected to report losses
for the second and third quarters this year.
One of the sources with direct knowledge of Nokia's pricing
said the steepest cuts of around 15 percent were on the flagship
N8, the multimedia C7 and the business user-targeted E6.
Other price cuts were smaller, both sources said.
"There are no very big cuts per model, but the scale --
across the portfolio -- has not been seen for a very, very long
time," said one of the sources, who works at a European telecoms
Shares in Nokia dropped 1.5 percent to 4.37 euros
by late trade. They have fallen more than 40 percent this year
on fears a shift to Microsoft Windows software may not
help it better compete with rivals such as Apple Inc's
A Nokia spokesman declined to comment on specific prices but
said the changes were part of its normal business.
In the past, Nokia has cut prices globally across its
portfolio once a quarter. But it has not used that tactic for
many quarters, instead marking down prices model by model.
Nokia's latest move could spark a price war, hitting vendors
such as Motorola , Sony Ericsson (ERICb.ST) and
LG Electronics , warned analyst Neil Mawston of
"Consumers and operators would benefit from
cheaper smartphones in a price war, but vendors with weak profit
margins could get squeezed," Mawston said.
Samsung Electronics Co Ltd will become the
world's largest smartphone maker this quarter, Nomura said last
month, overtaking Nokia which was a pioneer with its 1996 launch
of the Communicator model.
"Nokia is coming under a lot of pressure from competitors,
most notably Samsung who are also moving aggressively on pricing
to steal market share," said Canalys analyst Pete Cunningham.
Nokia's share of the global smartphone market fell to 25.5
percent in the first quarter from 39 percent a year earlier,
according to research firm Gartner, and many analysts expect it
to fall further during 2011.
Nokia's share of the British smartphone market,
seen as a key indicator for trends in Europe, dropped to 10.6
percent in the 12 weeks to mid-May, from 31 percent in the same
period a year earlier, according to Kantar Worldpanel ComTech's
At the end of May, it warned second-quarter results would be
well below a previous outlook and ditched its full-year targets.
Chief Executive Stephen Elop is pinning turnaround hopes on
the Windows phone due this year, but some analysts said Nokia is
losing so much market share it may never regain its footing.
"In May, European operators largely rejected the new Nokia
models, particularly the E6 and C7," said Tero Kuittinen,
analyst with MKM Partners.
"This is now driving panic price cuts for those models but,
without operator support, price cuts rarely work."
(Reporting by Tarmo Virki; Editing by Greg Mahlich and David