Nokia (NYSE: NOK) has cut the price of its flagship Lumia 900 in half to $49.99. The smartphone is available, among other places at AT&T’s (NYSE: T) as a “web only” special.

The price change appears to be another defeat for Nokia, the flagging handset maker which was the number one manufacturer in the world for years. Samsung took that distinction late last year. Nokia has had tremendous trouble as it tries to break into the upper level of the industry — smartphones. This market, one dominated by the Research In Motion (NASDAQ: RIMM) BlackBerry, is ruled by Apple (NASDAQ: AAPL) and smartphones that run the Google (NASDAQ: GOOG) Android OS.

Nokia has gambled most of its future in the smartphone business on a partnership with Microsoft (NASDAQ: MSFT), which has used the Finnish manufacturer as a distribution platform for its unpopular Windows mobile OS. By extension, the price cut is a defeat for Microsoft as well.

Ironically, the decision comes just as Samsung launches its Galaxy S III, which many analysts believe is the only Android-powered phone that can compete directly with the iPhone.

Douglas A. McIntyre

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