The Carphone Warehouse has dropped the price of the Nokia XpressMusic 5310 to £82.18, after being on sale for just three months.
The Nokia XpressMusic 5310 is the first handset available on Nokia's Comes with Music service, which was launched in 2007 and allows users to download as many songs as they want from the Nokia Music Store for 12 months after they have purchased a compatible Nokia handset. Nokia says that users can then keep the music after the year is up. The Nokia Music Store features tracks from all four of the major record labels; Universal, Sony BMG, EMI and Warner Music Group artists.
The retailer says the price cut is part of its January Sale, which covers a number of handsets. However analysts claim the cost reduction is in response to poor sales of the handset.
Paolo Pescatore, analyst at CCS Insight, told The Times: "They are struggling with sales. Nokia is keeping shtum about figures but we've heard from sources they had hoped to do better in the run up to Christmas".
"Comes With Music is almost too good to be true. The average punter on the high street still doesn't understand how it works. Nokia needs to improve its marketing."
The price cut comes as Nokia revealed that the Tube 5800 - its latest handset available on the Comes with Music service, will hit the UK on 23 January.
Being touted as a rival to Apple's iPhone, the handset benefits from a 3.2in 640x360 touchscreen, GPS, a 3.2Mp camera with 3x optical zoom and an 81MB internal memory. A microSD card slot and surround sound built-in speakers also feature on the handset, which Nokia claims offers 35 hours of audio playback.
See also: Nokia Comes with Music DRM cracked