Nokia to start making cheaper phones to fend off competition from China The sources told Reuters that the Finnish company would introduce cut-price basic phones aimed at competing with the likes of Huawei and ZTE, as well as a new, lower-price model of its Lumia smartphones running on Windows Phone 8 software. Most Lumia phones cost over $200 (£130), and the top-of-the-range Lumia 920 can cost over $600 without a carrier contract in the United States and some European markets. By contrast, the average selling price of Nokia's mobile phones was 31 euros in 2012, down from 35 euros a year earlier. But analysts estimate Nokia's market share in the smartphone business is still only around 5 per cent, and that it needs to protect its position in basic phones if it wants to survive. Nokia's net sales of mobile phones fell 21 per cent in 2012 to 9.44 billion euros, while sales of higher-end "smart devices" slumped 50 per cent to 5.45 billion. The company sold 4.4 million Lumia devices in the fourth quarter, including the Lumia 820 and 920 which were launched in November. Many analysts say it needs to sell more than double that amount per quarter to convince investors that its smartphone strategy is working.