After taking
so long to transition to its next-gen OS platform, the company formerly known as RIM has an awful lot riding on
its first BlackBerry 10 handset, the Z10. The handset launched at the end of January in the
U.K. and early February in Canada (and is due to make its official U.S. debut this month). Not a great sign,
then, that some U.K. phone retailers appear to be cutting the price of Z10
tariffs, a mere month after launch — suggesting demand isn’t as strong as
hoped, and that the device isn’t as competitive against the high end of Android
and iOS as BlackBerry needs it to be.
Both Carphone
Warehouse and Vodafone have slashed tariffs, according to the Telegraph. It also appears that Phones 4u is offering
cheaper deals too now. BB10 is BlackBerry’s attempt to turn around its sliding
smartphone fortunes by offering a device to compete with the likes of the
iPhone and Samsung’s Galaxy SIII. BlackBerry’s global smartphone
marketshare fell to just 3.5 per cent in Q4 2012, according to analyst Gartner, down from 8.8 per cent in Q4 2011, while Samsung
and iOS took 52 per cent of all smarphones sales in Q4 2012.
Carphone Warehouse initially priced the BlackBerry Z10 from
£36 per month on pay monthly contract, bundling the cost of the handset into
that tariff. It is now offering the phone from as little as £29 per month, although that tariff includes a £29 up
front free for the handset. The Telegraph also says Vodafone
has introduced a new web-only deal for the Z10, costing £33 per month (this tariff also requires an up front fee
of £129). Phones 4u is also offering the Z10 on a £29 per month contract (again with a £29 charge for
the handset), having initially launched the phone on contracts starting at £36 per month. It is also offering even cheaper tariffs,
of around £20 per month, but with a much higher up front fee for the device.
The Telegraph
quotes James Faucette, an analyst at Pacific Crest, who said the tariff
cuts move the Z10 away from the highest margin segment of the smartphone
business. “We believe that meaningful price cuts so soon after launch,
while probably at the initial discretion of the carriers, is likely to relegate
the Z10 to being a mid-tier device with very low gross margins,” he said.
BlackBerry has
been making a lot of noise about Z10 sales but hasn’t backed up its hype with
any hard numbers, saying only that demand had exceeded expectation and that the Z10 is selling in “large numbers“. We’ve reached out to BlackBerry for
comment on the tariff reductions and will update this story with any response.
Asked how
sales were going in the Z10′s launch market, the U.K., at the Mobile World
Congress tradeshow in Barcelona last week, BlackBerry’s U.K. & Ireland MD
Rob Orr also shied away from sharing any numbers, saying he was unable to
provide much detail ahead of BlackBerry’s quarterly results.
Early sales in
the U.K. have been “very positive”, he told TechCrunch, adding: “I’m in a quiet
period so I’ll caveat my statement with the fact that our fiscal year ends on
[March 1st] and we publish results on the 28th. Regulated from a quiet period
perspective I can’t share too much detail but I’m very pleased with the
results, the partners are very pleased with the results. Take a look at some of
the feedback on Phones 4u’s site or Vodafone’s site are very positive.
“The feedback
from our enterprise customers has been brilliant. Really really good. They love
what we’ve done with BES 10, they’re aligned with the approach that we’re
taking, they’re cracking on with all their internal trials and their user
testing and all the stuff that enterprises do before they do mass rollouts. So
I’m really pleased. Couldn’t really have asked more from the support I’ve had
in the market.”
Expect to get
more concrete details on exactly how positive (or not) the BB10 launch has been
when the company announces its fiscal Q4 and fiscal full year results at the
end of this month.
While the
introduction of cheaper monthly tariffs may not help BlackBerry’s bottom line
in the long run, it may help to drive a few more Z10 sales in the short term to
to help buoy up its results. In the mean time, all the vague, non-quantifiable
statements aren’t helping dispel the sense that RIM isn’t yet doing enough
to dig itself out of the smartphone doldrums. [TechCrunch]
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