Strategy Analytics analyst Neil Mawston warned Nokia's move could trigger a price war at once hit vendors such as Motorola, Sony Ericsson and LG Electronics.
"Consumers and operators will benefit most inexpensive smart phone price war, but vendors with small profit margins can be squeezed," said Mawston.
Samsung Electronics Co. Ltd. will become the largest smart phone maker in the world in the quarter, Nomura said Samsung, last month, overtaking Nokia has pioneered the smart phone market since 1996 with the launch of Communicator models.
"Nokia will come under pressure from competitors, especially Samsung who are also moving aggressively in the price segment to steal market share," said Canalys analyst Pete Cunningham.
Nokia's share in the global smart phone market fell to 25.5 percent in the first quarter from 39 percent in the previous year. Research firm Gartner and many analysts predict will be much mired Nokia shares during 2011.
According to the survey Worldpanel Comtech's, shares of Nokia in the smartphone market in the UK has become a key indicator in Europe, Nokia's share fell to 10.6 percent in the 12 weeks to mid-May, from 31 percent in the same period last year.
In late May, the Nokia confirms second quarter results will be much better than before and achieve the target year.
Nokia CEO Stephen Elop excited Phone Windows operating system this year, but some analysts said Nokia will lose market share so much, will probably never regain its footing.
"In May, the majority of European operators refuse Nokia new models, particularly E6 and C7," said Tero Kuittinen, an analyst with MKM Partners.
"Now Nokia sparked panic at a discounted price of these models, without operator support, discounts rarely works," says Kuittinen told Reuters.
