Goes from $99 to $49 with a two year contract on AT&T.
The Finnish phone maker claims the drop is not unusual for a phone that is now over three months into its lifecycle. But inevitably, many will see this as a further indication of Nokia's failure to meet the challenge presented by rivals like iPhone, Galaxy S, HTC One et al.
As of April, Lumia has sold just over two million units since its launch last December.
The move comes a few days ahead of Nokia's 2Q results, which are expected to show more dramatic losses.
Last month, Nokia said it would cut 10,000 jobs to reduce costs and address its dwindling revenues. This followed a 1Q loss of €1.34 billion operating loss.