The reason why Lumia 520 is selling well is there is no phone from big OEMs like Samsung/HTC/LG/Sony with these specs at this price. Even the Micromax, Karbonn does have less storage and old cortex-a7 processors which perform badly because of android.
Another important reason is they got the price right at the launch for 620, 520 and 720. Launch prices are very important for becoming a hit for any company.
Nokia priced Lumia 800, 710, 610 high at launch. All of them are doomed even after reducing prices quickly never sold well.
Lumia 510 did reasonably well because of pricing at launch. Still there is problem with WP7 like no micro SD slot, Zune requirement etc..
Nokia did the same mistake again with the launch of Lumia 920, 820. Both are priced high at the launch and never took off but they did better than Lumia 800 and 710.
With Lumia 620, 520 and 720 Nokia got the launch prices right.
This is what I suggested when 920 and 820 launched in October on their conversations blog and on this site. I wanted them to release 720, 620 and 520 then.
Lumia 920: Rs 30K, (Now the price is down to 30-31K but launched at Rs 38K.)
Lumia 820: Rs 25K, (Now the price is down to 20-21K but launched at Rs 27K)
Lumia 720: Rs 20K, (They launched at Rs 19K lower than what I expected)
Lumia 620: Rs 15K, (launched at Rs 15K exactly what I wanted)
Lumia 520: Rs 10K. (launched at Rs 10.5K which I expected).
I was criticized for asking these prices by few people on this site. But I said many times Nokia need to get the launch prices right if they need to get big hit phones.
Samsung also facing the same problem with their launches this year. They have launched nearly 10 phones this year but only 2 of them are really big sellers and both of them are priced well. They are:
Galaxy grand: 5 inch WVGA phone. Launched at Rs 21K. Its a huge hit.
Galaxy star: small phone launched at Rs 5K. Its pathetic phones but selling very well because of price.
They launched Galaxy s2 plus, Galaxy Win (grand quattro), Galaxy Mega 5.8, Galaxy Mega 6.3, Galaxy core, Galaxy S advance (launched at 27K and now selling well because price is down to 13K in less than 9 months), Galaxy s duos (launched high but doing well after huge discount), galaxy fame (disaster).
From above phones none of them come close to Grand’s success or popularity because of high launch prices.
Micromax has got popularity, sales and praise because of high specs at good prices. They launched canvas 4 at Rs 18k with almost same specs canvas HD and everyone criticized them for the first time. People expected 1080p display but they kept almost same specs as canvas HD but priced 3K high so thats first handset to flop for Micromax.
My price recommendations (I am not an expert but I believe if these phones priced higher then they will fail) for the future Lumia’s:
1. Lumia 625: Rs 16K.
Lumia 620 launched at this price and now selling for Rs 13K. Lumia 720 launched at Rs 19k and now selling for Rs 17K which has better design, Clear black display, better camera. Also, Lumia 625 need to compete with Grand quattro (4.7 inch phone) and numerous android phones with big displays from indian OEMs. If they price at Rs 18 or 19K then it will be a disaster.
2. Lumia 320: Rs 7.5K.
They are currently selling Lumia 510 at this price. Some retailers are even selling it for Rs 6k because of leftover stock.
Nokia need to make WP8 phone with
3.5 or 3.8 inch WVGA screen,
Dual core snapdragon 200 (cortex-a5),
4GB memory, Micro SD slot.
3 or 5MP camera.
In some ways Lumia 510 has better specs than this phone but WP8 phone will bring some goodies like micro SD slot, more apps, no zune requirement.
Nokia need to release this in as many countries as possible simultaneously like they did with Lumia 520 and 720. It will be another huge seller because no android phone at this price gives good performance at this price.
3. Lumia 925: Rs 25K.
This has same specs as Lumia 920 or even worse (half the storage and no wireless chargin built in) but its coming one year after 920.
Nexus 4, Galaxy S3 selling for 25-26K. 920 costs 31K now and 820 is Rs 20K.
So they have a good chance of selling well with Rs 25K pricing.
4. Lumia 1020: Rs 35K.
There is very small market for high end phones in India which is dominated by iphone, galaxy S4 and HTC ONE which are having either brand value or much better specs.
Its a long read and pardon me if I wasted your time. But this is what I feel, believe as a follower of the Indian market and WP/Nokia fan.