Sunk cost
The cost of developing ANY phone is a sunk cost because the money has already been spent.
Margin is the difference between manufacturing cost and sales price. The smart phones are evidently rather more expensive to produce than el cheapos. Despite the opportunities for economies of scale, which should drop their input costs, Nokia is evidently failing to capitalise on that and has a remarkably high input cost in relation to the sales price of high-end phones. That spells trouble.
A 6% margin is still a margin, quite a nice one (as any retailer will tell you) so this is hardly "selling at cost". That said, it is still pretty clear that Nokia is going to hell in a hand-basket.
Biting the hand that feeds IT
