The UK’s Carphone Warehouse has slashed the price of Nokia’s Comes With Music 5310 handset from £127.10 ($185) to £82.18 ($119), a scant two and a half months after it hit store shelves. The all-you-can eat service has been dogged by skepticism from the start, and aside from Tuesday’s price cut there’s growing evidence that the service just isn’t doing that well. UK trade magazine Mobiletoday.co.uk’s took an informal poll of several Carphone Warehouse stores, which have reported that sales of the 5310 have been “dreadful.” In an earlier report, sales were said to be “OK, but not earth shattering.” Analysts are also blaming the cuts on lackluster sales.Nokia (NYSE: NOK) itself hasn’t revealed any numbers, though you can be sure if they had been a rip roaring success they’d have trumpeted the news by now.

So what could be the problem with CWM—especially considering the “wall-to-wall promotions” in Carphone Warehouse stores, as well as a nationwide TV, press, outdoor and digital advertising campaign costing over £10 million timed to spur holiday sales?

More after the jump

First, the service wasn’t exactly released on the snazziest of handsets, indeed, as Carphone Warehouse staffers told Mobiletoday.co.uk, packaging the new service on a new device might have drummed up more buzz for it. One noted, “Why do people pay for iTunes? When you put the glamour of something like the iPhone in front of them it’s easy to see why.” Or, as Global Crown Capital analyst Tero Kuittinen told Reuters, the 5310 is a “dumpy little Honda, not the exotic Maserati it should have been.” There also seems to be general consumer confusion over what CWM is. Music is marketed as unlimited and free, and while consumers can keep the tracks after their CWM service expires the songs remain tied to the original CWM device or the user’s computer. Plus, there’s confusion over why CWM is available on some versions of the 5310 or the N96 but not on others. Why, for instance, can someone who already owns an N96 not get the service on their phone? It’s hard to say what Nokia can do to turn sales around. Still, as Nokia sees it, there’s one promise that’s sort of panning out. Nokia’s manger of entertainment and communities Americas for software and services Trevor Madigan told my colleague Tricia at CES that some of the early adopters of the service are mothers tired of their children pestering them for money to buy music. He took this to mean that at least CWM’s promise to help cut down on piracy was actually turning out to be true as mothers, eager to teach their children not to steal music were turning to their product.

• Nokia Comes With Music Sales ‘OK, But Not Earth Shattering’
• @ CES: Moms Part Of Early Adopters For Nokia’s Comes With Music Service