How Microsoft and Nokia killed the Lumia 900

From a lack of carrier confidence to poor sales estimates, Nokia’s Lumia 900 sure has had a tough life since its April release.

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And the struggles aren’t letting up. In a move that likely bodes poorly for the device, Nokia and AT&T have slashed the on-contract price of the Lumia 900 from $100 to a budget-friendly $50.

A fifty dollar price drop just three months into a life cycle is a big deal for any phone, but with the Lumia 900, it’s charged with far more meaning. After all, this is the device that was not only supposed to save Nokia, but also inject Windows Phone more extensively into the minds of consumers. A price cut, however, tells a different story: Nokia’s little Lumia 900 may not have long to live.

Here’s the thing, though: The Nokia Lumia 900 has been dead for a while — it just didn’t know it. The death stroke came last month when Microsoft made the disastrous announcement that Windows Phone 7 devices won’t be upgradable to Windows Phone 8. This made the Lumia 900 obsolete overnight, killing consumer interest in a device that not even its biggest cheerleaders were supporting. Hello, Osborne effect.

On the other hand, the price drop is also further push for the Lumia 900 as a mass market device. This was, after all, much of the reason the phone sold for $100 to begin with: Nokia wanted to keep it cheap, and it wanted consumers to notice.

But this may not be the type of attention Nokia actually wants. With the cut, Nokia’s golden child is now rubbing shoulders with other, less illustrious members of AT&T’s $49 smartphone tier like the Samsung Galaxy Exhilarate, the Impulse 4G, and the HTC Vivid. These are phones that are as ancient as they are irrelevant.

So the price cut can go one of two ways: Either it will boost sales by making the Lumia 900 more affordable for more consumers, or it will sink the whole ship by showing that niether Nokia nor Microsoft has any confidence in the Lumia 900 game plan.

The move may also suggest that Nokia (or, more likely AT&T) is trying to move inventory ahead of the launch of a Lumia 900 follow-up. It’s also possible that AT&T simply did not have room in its $100 smartphone category now that Motorola’s Atrix HD has hit the market.

But with only three days before Nokia’s second-quarter earnings, this eleventh hour move reeks too much of desperation to be that well thought out. Nokia and Microsoft may have a plan for the Lumia 900, but if the past is any indication, it won’t be a good one.

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VentureBeat reached out to Nokia and AT&T to get a better sense of the reasons behind the price cut, and we’ll update this story when the companies respond.

Lumia 900 photo: Sean Ludwig/VentureBeat