What do Apple’s former CEO comments really mean for BlackBerry?

By Chris Umiastowski on 9 Oct 2013 01:33 pm EDT
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Yesterday CNBC Asia’s “Squawk Box” had an interview with former Apple CEO John Sculley. Those of you reading the tech news may have already seen an article (or a thousand) quoting Sculley in reference to BlackBerry. Here’s what he said:

"The challenge is you can't sell a phone for $700 in most of the world, so there has to be some real rationalization on the device side of the business...If you can strategically separate the device side of the business, it can be under the same ownership, but operationally separate from the enterprise service business, there's a terrific chance to turn BlackBerry around.”

Despite the fact that Sculley is widely recognized as the guy who almost killed Apple, I think there is a lot of truth to what he said. As a guy who isn’t intimately tied to BlackBerry’s past, we should look at his comments as a neutral third party with a lot of experience (success and failure).

It’s true that you can’t sell a phone for $700 in most parts. Apple and Samsung might be the only two companies who can really get away with this right now. Apple is ... well ... Apple. They always price things above the comparables. Samsung has also built up a very powerful brand with the Galaxy series, and now with the Note series.

BlackBerry had that brand power at one time. But today they’ve lost the power. They also face the threat of a shrinking audience. Given Metcalfe’s law, which states that the value of a network is proportional to the square of the number of users, it should be obvious that BlackBerry’s core focus must be on increasing the user base.

BlackBerry had that brand power at one time. But today they’ve lost the power.

Without brand power, they can’t have their cake and eat it to. If they are to accelerate adoption they need to put out high quality hardware and sell it without an expectation of making a lot of money. The goal of the hardware business should be to get the numbers up without burning cash. That’s it.

HTC might serve as a good example of a company that has also lost brand power in the last couple of years. HTC used to be highly respected and very profitable. Now, thanks to Samsung, this is no longer the case. They currently make about 20% gross margin on their hardware, and they lost about $100 million last quarter because they had a tough quarter (they call it a transition), and their operating expenses are higher than they should be given the sales figures.

I think BlackBerry needs to target sub 20% margin on hardware also. The last time I dug into manufacturing costs was back in December, and it seemed to me at the time the average total manufacturing cost for BBOS devices was $240. This factors in the bill of materials, manufacturing, fulfillment, and whatever else goes into the “cost of goods sold” (COGS) line. It seems logical to assume BB10 device cost a bit more, but probably not higher than $300.

One year ago I didn’t think they’d need to ... but today I think BlackBerry needs to put out hardware at $350 retail. They need to sell devices unlocked on their website, and seed the written-down Z10 inventory to enterprises in return for a continued commitment to the BlackBerry platform.

Later, and I mean much later, if this company can solidify its position in the market again, it can think about raising prices. But for now?  Early adopters of a new platform need to be rewarded with more attractive pricing.

Topics: BBRY Apple Editorial

Reader comments

What do Apple’s former CEO comments really mean for BlackBerry?

252 Comments

If they were to sell devices at the $350 mark unlocked on their site, I'm sure you would see a huge spike in sales when launching a new device.

I for one would pick up each new device as they were released.

Posted on a Post-It!

+1000001 Agreed!

Well said Chris!

This is what I ve been saying even since when they launched the PlayBook with no app ecosystem and the OS half built. They still think they can compete with Apple and Samsung with their pricing to consumers.

Makes complete sense. Sell the phones low to get a foothold in the various markets and as BlackBerry becomes intertwined with everyday living they can offer premium brands at high end prices.

Posted via CB10 from my Z10 or PlayBook!

To Chris' point. They have a warehouse of unsold Z10's. They've taken the write down on these -give them to everyone at a Fortune 1000 company and a employees and friends program and get the market back. For bloody sakes man.

Posted by my awesome Z10

Yup, and then recovers that money over the months by tailoring ads just for you based on the info it can get through your phone. While I personally wouldn't any part of that, it's actually smart on their part because the majority of consumers don't care about the privacy concerns.

I not only don't care, I like it! So let me get this strait. I save $300+ and I get to Google now, Google maps, gmail, Google Calendar, and the play store. I'm totally fine using all their services because Google now is so great. So I see ads. Not a big deal to me. I don't don't care if Google's bots "sky net" scans my emails to aid in more targeted ads as well as a way for Google now to get the info from my email, calendar, and maps to let me know I should leave due to traffic or things like that. I like how Google Now will notify me that something I purchased has shipped. It tells me when it got delivered. Without them scanning everything this isn't possible. I wonder what the charge would have to be if you wanted to just pay for the service without ads? Would that mean you have to pay full price for the phone? I'm not sure but I'd agree it would be nice to have the option for everyone who wants to pay for services rather than advertisers paying for the services. I'd have to say though as this all gets more refined the ads might become beneficial meaning you could start seeing ads for things you really need and maybe the advertiser for that item could give you a better price for that item knowing that it saves them money to advertise with Google knowing they will get ads to people who really need that item. Just my 2 cents.

They should just re-brand it as the Google sky bot 5000 to avoid any future privacy litigations out of the gate.

Posted via CB10

The cost to manufacture Nexus 4 was $190-195 so at $299 is still a profit..Blackberry is greedy and as the article states they no longer have brand power. The z30 is not a premium phone and should be priced at $250 not $700

Agreed! If BlackBerry was smart and priced their devices a lot more cheaper to appeal to get them in the hands of ppl I'm sure they would be doing a lot better and wouldn't have such a huge inventory of z10s

You can't run a profitable tech company on these type of margins. As @tvst28 noted, Google makes it up in the back-end (in the particular case with Nexus and LG).

well, there's that & the fact that google has thier fingers in billions of dollars of other things ,too,,,, maps, earth, search, etc all bring in boatloads of cash,,, i' sure there's a legit economic term for the point i'm trying to make...

I've never liked Sculley. Thought he was possibly the worst CEO of Apple ever. But he is right when he says that BB phones are WAY too expensive. The Z10 should be selling off contract for under $400 and possibly even less. No way anyone is going to buy it for 600-700 dollars.

He's right in saying BlackBerry can't sell a device for 700. They are foolish for thinking this

Thorsten Out!!!

I agree Chris. Get the phones into people's hands immediately. With numbers there is power. I work at a big US bank that still uses BlackBerry phones, but only old BBOS phones. I am still surprised that they have not authorized BB10 phones to be used on our network. BlackBerry should have shipped them dozens of free Z10's and Q10's to get them into the hands of the executives and on our network on Day 1 of their release.

I agree! In fact, they really should begin to think outside the box as to how to get these phones in youths hands. I was thinking that they could package Z10s as graduation gifts or offer them to inner city and rural kids who can't afford a quality phone. Kids will automatically be connected to their friends via bbm and hopefully will keep them on board through adulthood.

Posted via CB10 from my Z10 or PlayBook!

+++
Great Idea! Go for it BlackBerry! Be imaginative! Be courageous! Be SMART! Do whatever it takes to LIVE, and PROSPER! Do it. Just Do It. Long live BlackBerry.

Youth will not buy BlackBerry until the app ecosystem improves. In a year or so yes but now where best bet is to focus on enterprise and prosumer markets.

Posted via CB10

Nexus5 @ $299. Wow, how can you compete with that? Good job they won't be able to meet demand, as usual...

Posted via CB10

Well, "clearly" there must be a way to do it while still making enough money to keep operating. There is ALSO an International Trade Agreement provision that covers the practice of selling 'anything' BELOW its cost of manufacture (called "anti-dumping") BUT some creative accounting can obfuscate the true cost/s and make it possible to use kick-backs and incentives as a way of reducing those numbers so as not to get caught ...

Either way, selling a $300-350 (cost) item for $700 is "great" in principle, but I've long argued FOR the "Wal-Mart model" of selling s#*t "just above cost" in order to gain acceptance and market share WHILE also putting the squeeze on your competitors' positions.
THAT will only work for so long, esp. since Google has a "Zero" cost-base for its O/S ...

In retrospect, (the) RIM (of old) DID play by those paramaters, and so we got the "Curve" line of phones that WAS cheap and functional and - for the most part - UTTER LOW-BUDGET CRAP.
THESE are the phones people had outrageously crappy experiences with and that drove users by the 1000s over to iPhone without a second look or thought.
The REAL coup is to sell a HIGH QUALITY device at Cut-Rate prices ... kind-of like how the last 64GB Playbooks got sold-off at $199 ... THAT was a real deal!!

"Rock" meets "Hard Place" ... with BBRY in the middle.

Just my 2 cents from this penny-less country.
Cheers & Keep Moving!

They already stated before. They make more profit on people using their services than people buying their phones. Thus is why they have no problem selling nexus phones at such a price range

seed seed seed, get those phones out there any way you can. you can always work on increasing that profit margin down the road. doesn't do any good if no one is buying into your ecosystem.

Chris,

A company making a proprietary platform can't run on 20% margin. My rule of thumb says 40% is sustainable. With a COGS of $240, that leads to a sales price of $400.

Is there a worldwide market at that price? Probably not, but they could be being more aggressive at introduction. I think the introductory prices over $600 are giving everybody indigestion.

An alternative is to outsource HW design and production. Buy off the shelf devices designed to run Android, and load BB10 on them. Probably something they're looking at.

unfortunately they are pricing the Z30, a low-mid level phone, as high as premium phones..it has Fail written all over

Well, the cost of a HIGH QUALITY $400 device (Z10 & 30, Q10) IS do-able vs. $600 (iP5S & Nexus/Galaxy) competitors ... but a $400 Q5 would NEVER sell ...

Lastly, I think it would make EVEN MORE SENSE for BBRY to modify (or create a new) the Android Kernel (it's Linux-based, for Pete's sake!!) specific to BBRY with 100% Android compatability.
SNAP: Instant Apps Ecosystem WITH guaranteed BBRY-security, not that Google spyware that is the kernel.

Just my 2 cents from this penny-less country.
Cheers & Keep Moving!

I think this is what BlackBerry has to do now. Get these devices into the hands of people, even if you are making pennies on the dollar. At $350, I would seriously consider buying a Z30 unlocked off contract. I could save and justify that cost. $700 is more than a Rent payment for the month for me, so I can't buy that and I just got my Z10 at the start of a 3-year term so upgrading with a subsidy is also not an option.

As people have already pointed out, the Nexus 5 is also on my radar. I'm considering trying out a second device and at a $300-400 price point, That's something I might be able to cough up to try. Google knows that they need to get these devices out there. They will make their money back through their services.

Many vendors on Ebay sell Z10 now for only $297 and the Q10 is $380.
This came as unlocked, T-Mobile, Verizon and AT&T.

Just check it, and the prices are coming down day by day.

Truly agree with that the price of the phone is on the high side & it is indeed beyond the reach of the majority of the people.

Posted via CB10

Gotta agree with the seeding devices issue. They have millions of Z10 and Q10 device they will never shift. Make them pay their way by getting these out to current BlackBerry7 enterprise users, and getting them hooked into BES10.

They won't do it, though :-(

Posted via CB10

Everybody like free stuff. The Z10 are already written down anyway so giving them to BES10 customers is a great way to get people on-board.

That would be the case if they wanted to compete in the consumer market, but it's clear that they want to focus more on enterprise and prosumers. Enterprise and prosumers are their target market and for the most part are the niche that's willing to pay 700 dollars for a device because they're not just buying a phone. They buying a device that they think is going to help them get stuff done and do it securely. They/we are willing to pay a premium for the peace of mind on security matters and knowing they can confidently hammer out lengthy emails and messages all day long with out having to worry about terrible auto correct substitutions or constantly having to re write and edit their messages. We're not just purchasing a device, we're purchasing an experience. BlackBerry offers an experience that I for one am willing to pay more for.

"The Best Device is Debatable - The Best Security is Not"

Keeping their head in the sand believing they can stay solely in the enterprise market is the issue. Todays corporate environment is a BYOD environment now. It isn't like it was in 2006 when BB was the shizzle...

BB has done some great things but they fail to realize that the consumer is what is driving things... Corporations are simply expensing the employees personal phone rather than providing them with a company line (other than government).

Agreed . BYOD is a huge threat to bbry's pitch. So other than in environments where absolute security is required, its adoption is going to be challenging.

Posted via CB10 from BB Z10 (My stable: 8310, 8520, 9900, Z10)

"Enterprise and prosumers are their target market and for the most part are the niche that's willing to pay 700 dollars for a device because they're not just buying a phone."

The existing sales numbers don't back-up what you're saying. The phone(s) has been available for MONTHS now.

If 'prosumers' are willing to pay this price for this phone, then why haven't they done so already?

Stop wishing on stars and look at what's actually happening around you.

What's happening around me is that consumers haven't flocked to the phone, but due to the security certifications BB10 has now, we've seen more and more reports of adoption among government agencies, police departments, and enterprises. As the platform solidifies and more and more bugs get worked out of the os, we'll continue to to see more businesses and people who rely on their phones to get work done, gain trust of the BB10 platform. I can understand why companies wouldn't want to switch their entire userbase over to BB10 while it's essentially still in Beta, but that will change with the release of 10.2 to all the phones and as BlackBerry's company outlook becomes more clear. It's hard to convince people to commit to a platform they don't believe will be around much longer. When BlackBerry convinces companies that it will in fact be around much longer, we will se even more enterprises commit to BB10. And even with BYOD being the trend, BES is still regarded as the most secure way to manage cross-platform devices and I think BlackBerry is well aware that they need to lock that market segment down. I stand by what I said. Now if you'll please excuse me, I have another pitcher of kool-aid to make. It's especially tasty today =)

"The Best Device is Debatable - The Best Security is Not"

"BB10 has now, we've seen more and more reports of adoption among government agencies, police departments, and enterprises."

To say "more and more" is quite a stretch. The platform has been certified by some Gov agencies here in the states. But adopted??

"but that will change with the release of 10.2 to all the phones and as BlackBerry's company outlook becomes more clear."

You really should stop and think before speaking in absolutes.

"Now if you'll please excuse me, I have another pitcher of kool-aid to make."

Drink water, it's healthier and better for the brain...

Your hypothesis makes sense, however -- like any good experiment -- the data always wins, and the historical data has conclusively and incontrovertibly shown that this hypothesis is 100% wrong.

I support BB10, NOT BB Management!

Yes, I agree. We. May not see discount handsets in Canada as there is still a market for BlackBerry in Canada. There does seem to be an issue with BlackBerry and programming of BB10. Why would they launch BBM4ALL, then pull the launch and take weeks to relaunch? In my view BlackBerry is even further behind the development curve than we think. Given that BBM4ALL qas never supported by even the current CEO, it does seem that it was never even being developed until it was announced. One would think the BlackBerry brain trust would be dealing with several "what if" scenarios at all times. It does seem as if they have been blindly pursuing one business stream without any or little planning for other scenarios. There has been precious little shake up at the board level over the years as well. It would be my hope that at present, BlackBerry is aggressively pursuing the licensing of BB10 as it is clear they will be exiting the handset business. Seems, again, as if BlackBerry has been very slow in moving in this direction.i find it hard to believe they could not have a licensing agreement in lace at this time. Streategically, it would be wonderful to strike a licensing deal before they announce they are leaving the hardware business. At least BlackBerry owners will now there will be future handsets for BlackBerry users to migrate to. Why does it seem to take BlackBerry so long to react to events as they unfold? It almost seems to me there is something structurally holding things back. Things happen to slow and seemingly very seat of the pants type decision making events.

Posted via CB10

He is not a talking head, but I don't know of anyone who knows the industry better. He is a wizard when it comes to data and communications. I think he just needs to tweak his personality on camera.
If you have heard him via radio, he does really well, just seems to choke with video.

Agree with seeding enterprise clients with Z10s. Has to go somewhere. They can potentially get more bang for the buck going that route with the written off inventory.

Nexus 5 with its 2300maH battery with 4 cores? is not bad. I'd take a Z30 with 2900maH with 2 cores and never worry about all day performance ever agian.

Posted via Q10 using CB10

I remember saying the exact same thing and getting attacked for it from the majority of you guys. You simply can't have an ecosysteme 1/5 that iOS and Android and price it to the same to compete. The marketing end of BlackBerry has always been its main problem. The 730 is going to have the same if not MORE problems than the Z10. Its priced tooo high and still lacks a ton of apps; namely top ten wanted apps. Its just a sad that such an amzing OS will most likely die after this.

Too true. It has to be cheaper... much cheaper to attract new users to an untested platform. or else the argument goes "why should I buy a BB10 device for the same price I can get an iPhone X". But if BB10 devices were a few hundred cheaper, then it's a completely different argument.

Imagine if at launch they sold these things for 300-350 bucks. They would have sold out of Z10s ages ago.

National Rail Times App for BB10 (Native Q10 and Z10) - http://appworld.blackberry.com/webstore/content/20352963

The devices will sell themselves if they can permeate the market. I show mine off all the time and people are surprised at how nice the phone and BB10 are. However, they would never pay that much for them, especially with major US retailers going non-contract. People are tired of paying so much for phones and monthly bills. If they dropped the price, offered incentives and sold them dirt cheap, I think a lot more people would buy them.

Posted via CB10

Chris can you write a post about the latest class action lawsuit against BlackBerry? How common this kind is and what it means, ect.

Posted via CB10

People have already chimed in their responses over in the articles. When the company is up for sale, potential buyers look at any legal cases the company has against them. There is uncertainty involved which could potentially lower the cost of buying or even detract potential buyers from even think of buying the company. There is no fixed cost associated with legal cases which could prove to be hazard tor the new buyer if they are required to pay millions in the future for previous owners.

Posted via Z10

If they have to look at this article for guidance, I weep for them. They are supposed to have smart people working there lol.

Posted via Z10

Maybe there is a hidden reason why BB is not dropping the prices on the Z10's to get them into the people's hands? Maybe they realize that BB may no longer exist so whats the point.

Dropping the price to seed the product seems obvious to everyone, except BB. Must be a reason why they are not doing it?

Bought the Z30 unsubsidised from Selfridges London. The hardware is great and BB10 is forward-thinking and has tons of potential. In my experience, many people would pay full price for a killer device like the Z30. If BB keeps coming out with high-end devices and get more high quality apps on the App World, they have a great chance of getting back a lot of the market share they've lost.

You can't raise prices again after they come down... Does not work that way with CE...

The fact is that BB needs to put on a full court press marketing effort on its image and APP development. The OS is great, the computer interface (BB Link) sux, so that also needs to become more of a hub for APP WORLD rather than a simple sync interface that is hit and miss.

The price point of their devices is not the problem, the lack of foresight and not listening to the customer IS...

I talked to the BB VP of Sales and Marketing back in March of 2010 and he was adamant about sticking to their guns on form factor and the "physical keyboard"... At that time if the switch had been made to launch the Z10 they would have had a home run... instead, Apple and Samsung moved forward and annihilated BB with their virtual keyboard devices. The Storm/Storm2 (both of which I used and loved) were buggy devices that BB never put enough thought into as the browsing experience (which is what grabbed people with the iPhone) was HORID!!

Today it about ecosystem more than the device itself. BB's security and email are best in class but they do not know how to market the product, nor support their customers. They sat back and let the competition completely kick their ass while they watched and let it happen right before their eyes without as much as a whimper until it was too late!

Can they resurrect the brand, Yes... Will they, probably not! They need a partner that knows how to market "the brand" and then get in front of the ecosystem issue. The ONLY hope for BB is that someone like APPLE or SAMSUNG buy them and clean house! MS or Cisco or ANY of the other brands will just get the same results because they don't know how to market and they are lazy!

BYOD killed enterprize 2 years ago. There's no place for it to logically survive. Most phones these days have a strong enough security base to pass BYOD. If BlackBerry goes Enterprize, they'll have no more than a year before being completely abandoned. Its sad. I know my devices are the best in the market. My Z10 is great all around. My Q10 gives my work and play w/o giving up my keyboard and even the now 3yr old PlayBook is still my goto tablet when I'm on the go. So why is BlackBerry failing so miserably?... 2 main reasons... Too lil too late and horrific marketing.

Makes sense, go bbry sell those device getting dirt @ cp and make some momentum build, with 10.2 u can make some apple and samsung faces turned to bbry back.

Posted via CB10

Unfortunately Chris, i think your analysis is late! When crackberry users moaned that the launch price of the Z10 was too much for what it was most of the moderators on this website said it wasnt all about specs, so we all went out and got our Z10s only to realize it wasnt woth the £550 price tag on it. There were simply better phones to spend that kind of money on and trying to tell other people to give those other devices up for the Z10 was impossible. Blackberry had their last chance with BB10 and the Z10. They did everything right, created the apple like buzz and screwed up with the pricing. Most crackberry users said it in the forum at the time but nobody listened.

Watch out for Firefox OS and cheap Chinese phones in emerging markets. Epic win. BlackBerry pricing and marketing strategy? Epic fail.

Posted via my BlackBerry Z10

Heins has been a failure when bb10 slipped. There should have been good will.for users for z10 upgrade. Half price for old BlackBerry devices. No way should you sit on million unsold devices

Posted via CB10

Lots of us have been saying this for a while. BlackBerry need to be pricing for volume in order to get their numbers up, which in turn will bring more apps, which in turn will bring more numbers. Why they priced so high is beyond me. They're no longer considered a "premium" brand. Most BlackBerry phones I see in the wild are curves in the UK. I don't think BlackBerry is seen as premium here.

Posted via CB10

A couple things that I agree with this article:
. the $700 price tag for the Z30 is too high. BlackBerry should just break even on the hardware to gain user base. Then, all the big name apps will come naturally. Amazon has done it with their Kindle line and it works.
. use the written-off Z10 for corporates as an incentive to get on-board with BES 10.

250 USD at most. This is the only way to achieve volume.

Posted via CB10 from BB Z10 (My stable: 8310, 8520, 9900, Z10)

Agreed. Yet despite it making the most sense, BB insists on trying to sell the Z30 for $700 CDN. TH just keeps shovelling BB's grave deeper and deeper. I'd jump at the Z30 if it was $350... even $450... But I wont touch it at $700.

Shame...

Every BB10 device out was an overpriced rip off. Well in excess of $300 more than anyone was willing to pay. An unproven platform with a small ecosystem and a OS not finished it's no surprise it never sold at the crazy prices they were asking.

If they sold them unlocked for $350 they would have sold much better, so much that the old BBOS7 wouldn't be their bread and butter still.

I live in Waterloo and my work is like 2 blocks from BlackBerry, we use BES, I hope they give us some new BB10 devices!

Posted via CB10

I don't know what the figure should be, but there also has to be a cost included to support further OS development. Similar in a way to the added price of paying for all the Microsoft stuff on PCs. $350 seems like a low figure to me.
With respect to the Z10, I agree that some sort of a fire sale to get it out as broadly as possible would be idea. You want people to get used to BB10 and get over the "it's different than what I have now" issue, so that they will be more likely to buy a Blackberry device the next time they buy a phone.
I don't know what the high end is of what Blackberry can demand for their premium devices, but until they reverse the declining sales issues, they definitely need to get by on pretty slim margins for the Z30 as well.

Yes but think of it this way. So more people have a BlackBerry device which means more people will use BBM. After a while BBM channels will get momentum because of it and they can make money from ads or promoting channels. On top of that they will get more developers for their phone increasing their revenue.

After a while people will like BlackBerry more and are more willing to buy their products.

I've been saying this before the pricing is ridiculous but I still bought my Z10 when it first came out cuz I'm a BlackBerry supporter. People who doesn't like BlackBerry won't spend 600 for the BlackBerry 10 phones...had they priced it at 300-400 sim free it would have been a different story..

Posted via CB10

More people would've bought the phone and we would be in this situation vis a vis apps and the ecosystem. We could've really given MS and the other a real run for their money. Instead we have a billion dollar quarter write off and disrespect all around for what is probably one of the best if not the best mobile OS in the market.

Posted via CB10 from BB Z10 (My stable: 8310, 8520, 9900, Z10)

I (and many others as well) have been saying this from the beginning; sell BB10 phones at cost (or at a slight loss even) just so they get into the hands of consumers. They should have done this right off the bat. It would have sucked financially, and they would probably have even less money in the bank then they do now, but they at least would of had a consumer base.

Posted via CB10

They should have realised one year ago. They were/are out of reality and a lot of us have said so for ages. Had that been the case, those written off Z10s would be in the hands of happy customers making a bigger user base and attracting more developers and users...
If you want to charge premium, you need to deliver premium.
Too late?

Well said. BlackBerry can't expect people to shell out top dollar for a product people don't know they need. I'm a huge BlackBerry supporter, but the company needs to realize that people don't want a BlackBerry because BlackBerry isn't cool. And unfortunately, being cool is more important than having a quality product. Lower prices will get phones in the hands of young people who are looking for something that their parents and grandparents don't have.

Posted via CB10

You failed to mention that Apple and Samsung build their device abroad while BBRY manufactures their devices locally causing the sale price to be driven up.

Exactly what I said in one of the forums, reward early adopters with a much much better price. But Chris, do you think that Samsung may respond with a price cut? They can an if they see Blackberry gaining some traction maybe they respond

There is no doubt that the noose around BBRY is that their devices current price on the BB10 series makes it too easy for choices to be made to go to the other guys. Who this day wishes to risk $199 on contract or $700 fees for phones.
If they could align themselves with a strategic partner to produce devices that are within the $249 - $399/$450 range then they stand a much better chance of a turnaround, as it stands the Z30 may get the 'return to sender' from the stores in a worst way.

I wouldn't even hire Thor as a janitor... he doesn't deserve a paycheque.. here's the pricing should be
Z10 300-400
Q10 300-400
Q5 200
Z30 450

The people who decided the prices for BlackBerry are out of touch and soon they will be out of jobs..

Posted via CB10

I agree 100%. They have nothing to lose and everything to gain.

Posted via CB10 ~ visit my portrait channel C0011B779

Great article, great perspective. I only hope that whoever ends with with BlackBerry (as a whole, not it's parts) needs to listen to people like Umi, and be quick about it. It's not too late to turn this thing around, with the right leadership.

Posted via CB10

One of the few comments made on BlackBerry that made too much sense... hopefully BlackBerry is listening

Posted via CB10

bingo,,, and there's probably a bunch of people thinking the same way,,, why sell 1 device @ $700 when you can sell 2 or 3 @ $250-$300,,, oh, wait, they've got to subsidize all those parachutes...

I very much agree. Licensing the OS wouldn't hurt either, just keep the controls on what can and cannot be changed tight.

Posted via CB10

Devices for 350 no contract would be awesome. I also think they could move all that stock doing something like this.

Posted via CB10

BlackBerry already said they are repositioning the z10 as an entry device so I wouldn't be surprised to see it priced at $350 or so soon.

Posted via Z10

Blackberry lowers price, samsung does that too, BB responds back and lowers it even more, samsung follow suite, my 5 year old kid bro starts using a Z10. What a wonderful world. You all forget that the lower the price, the lower the value. Look what happened to Nokia. BB needs to develop hardwares not cut prices. We see same phone over and over again but with just a different name and build. That's an error. Throw in something big and the users won't mind the price.

That's true!
Firstly Blackberry came again in the smart phones market too late with innovations, when the market was divided by anroid and ios platform. Coming again in the market with a all new OS required some hard work and a good strategy which they failed at because the bb10 devices have many bugs and etc. I am using a Q5 and it has heating problems, even when replaced by the company I face this problem.

Posted via CB10

It's one of those mistakes BlackBerry keeps making over and over and over again.
The launch price of their BB10 devices has ALWAYS been way too high. Z10, Q10, Q5, and now Z30. What was it, $700 off-contract? That's ridiculous. By sping 2014, they'll be sitting on a shitload of written-off Z30's as well.
Even Apple isn't getting away with this anymore: the iPhone market share has been declining for some time now. The only difference is that Apple has a very loyal (or stupid, whatever) fanbase that will buy just about anything that appears in the Apple stores, and they don't care about the price. But also, Apple still has a customer base worth mentioning.

I really don't know how these price settings are determined, but BlackBerry should really fire the persons responsible for this. Making the same mistake four times in a row is simply unforgiveable (pardon me, five times in a row. The PlayBook counts here as well). I may sound like an armchair CEO now, but this is so crystal clear, it's appaling that no one at BlackBerry seems to recognize this problem until it's too late. If they started by selling their devices at break-even, I'm pretty sure the BB10 market share would be higher by now.

But when will they ever learn...

I think most people here on CB are too hard on Heins. True he also made mistakes, but when he inherited BlackBerry, it already was a sinking ship. I really blame Mike & Jim for this mess. They didn't innovate when they had to. But anyway, I don't care who becomes director when (if?) Fairfax takes over, as long as he/she gets the company back on track!

We are talking about the screwed up launch of BB10 and pricing BB10 rediculously high. How is that Jim and Mike's fault? Heins is a total dud and has failed on every front. Not only has he totally screwed up, he is a coward, who has no courage to come out and admit his mistakes, instead he is is hiding. In fact, I even doubt his integrity in manipulating recent quarter results in driving down the share price of Blackberry to benefit selected few. Please stop supporting Blackberry CEO and its top management. Supporting these incompetent bunch will only expedite Blackberry's demise.

I think they did the BB10 launch the best way they could, except for the marketing. The pricing has always been terrible, but I've covered that pretty thoroughly in my previous post. But that's not the root problem. The root problem was that BB10 should have been launched years ago. And that really is Jim & Mike's fault. They sat on their ass while iPhone and Android stole market share, arrogantly convinced that businesses would stay loyal to BlackBerry. They could not have been more wrong. And that's what lead to BlackBerry's precarious situation right now. In comparison to this grave error, all the mistakes Thorsten made seem very small.

Thanks Chris !
Agree for the most. But since you pointed the "brand power" it's also a very difficult exercise to bring it down to the mid-low range. More, bringing it back to premium range will be a real challenge, as the new adopters of a medium cost device may not be willing to pay the real price.
Therefore, I believe they still need a flagship within the $500-$600 range (say, the Z30 ?) and go in the "curve-like" direction to attract masses (Q5 bis ?)
Yet, spreading the Z10 as incentive tool to enterprises is more than a good idea, it's - IMHO - mandatory and - still IMHO - even planned from first FY 2014 E.R.

Excellent post, poignant, well-written and articulate. This is the core of CrackBerry when the rubber meets the road and consumers and prosumers need information fast and accurate from a company they trust invariably, to 'tame the chaos' of doubt, worry, and fear of the unknown. Thank you Chris.

Great ideas Chris.

But WE ALL KNOW :

BlackBerry will do NONE OF THIS.

They will continue to sell BB10 devices at a premium. In fact, I'm betting they try to INCREASE their margins -- yes -- I believe that BlackBerry management IS THAT STUPID.

They still don't believe the fact that the BlackBerry brand has been almost universally tarnished.

They still don't believe that the number one reason many people won't buy a BlackBerry phone is simply because it is a BlackBerry.

I support BB10, NOT BB Management!

I'm 4rm South Africa apart 4rm price the other reason abt 90% of the Ppl aren't Buying BB10 its bcoz it doesn't have BIS...My question is y cnt they upgrade BIS 2 @least BIS10 lyk BES10

BIS is supported by BB10. It's the carriers that decide whether to use it or not.

However, many carriers don't support it because they have to pay BIS service fees to BlackBerry if they do.

I support BB10, NOT BB Management!

Stop typing like an idiot iPhone user. This is CB, home of blackberry. Show some respect.

Posted via CB10

It truly pains me to say this but perhaps BlackBerry could make use of Android as a platform to grow it's customer base again.

I think it has been said in the forums that it would not be too difficult to produce an Android phone with a BB10 OS like UI.

Perhaps this would allow BlackBerry to sell lower spec hardware at true budget pricing? By loweer spec I mean a device that runs well with less than 2 Gigs of RAM.

If BlackBerry made an Android phone that had a BB10 like UI but at or below SGS X Mini pricing I would buy that phone. BlackBerry already has BBM (almost) ready for Android so the BlackBerry experience is potentially available for a BlackBerry flavored Android device.

BlackBerry could use the Curve and Bold names to distinguish the Android devices from the true BB10 devices.

Posted via CB10

It would be extremely difficult to get BlackBerry level security in an Android OS fork.

I like the idea of them using commodity Chinese-made Android handsets and loading bb10 on them.

That way we could still have bb10 on cheap but high-spec hardware.

I support BB10, NOT BB Management!

Sell the phones at cost, or at slim margins, to get them "out there." If the phones aren't selling, the app makers aren't going to make apps. If sales numbers go up, apps get made, people take interest in the phone, more phones get sold, price can increase to turn a better profit. Without app support, BB just cannot compete. I'm not in denial like many... I see the reality- no big time apps in a timely fashion = no sales.

Now that we actually have nutflix in my house, I find myself extremely jealous that my lady and her kids with Kindles can use it, but my Playbook can't.

A million phones sold at cost beats the sh1t out of a million phones sitting in a warehouse. Seed the products at all costs!

Forget it - the price of the hardware is a red-herring, even if they put the hardware out cheaper, they simply cannot compete with the marketing and promotional budgets of the big players. People keep talking about the $2.5 billion cashpile BBRY have, it's chump-change in this sector.

Competing like this, for some mysterious and unknown goal is not sustainable. So lame that people have these beliefs of a "top 3" or "beating apple" or whatever other nonsensical competition to decimate the opposing party might be.

Posted via CB10

#3 spot is not impossible (Windows Phone actually dropped in market share recently I believe).

Beating Apple or Samsung is a pipe dream though. Don't n think anyone is arguing that BlackBerry can do this.

People just want the BlackBerry handset business to survive at this point.

I support BB10, NOT BB Management!

Definitely agreed. With all the negatives (real or imagined) facing a user when it comes time to buy, price should never be a negative.

In fact, while I don't think straight discounting would work, they should have offered existing users the opportunity to trade in (or swap even?) their existing BBOS devices for BB10 devices.

Why not offer late-model BBOS users the Z10 for free or for the cost of shipping? They already took the loss on it...now they can make it into an investment.

Posted via CB10

Yep,

fpor those who say they can';t survive at $350/U ... (that would be for Z10, same for Q5 , prob $400-$450 for Q10 and a step above for Z30) .... remember they don't sell at $700 ... check pout eBay for what people will pay for new unlocked phones ( no warranty!).

Seeding the marketplace is a necessity , they should've done this already. Once eople start using the interface they love it and show it off and perhaps more will come.

LATER .... they can move upmarket again if this works

and Nexus products, an entirely different customer, they have never been very successful and Google really doesn't want to sell that many of them. Only one Android brand sell well and even Samsung is stumbling a bit.

Apple ...who cares , people will gradually start switching away but they will always have a big chunk

BB is a niche player and should be able to be successful on 5-8% of the market plus services

Damn, I was thinking the same numbers. The Z10 would have sold like hot cakes here in Brasil at R$700 off contract (R$500 on a one year maybe - yes, by law we can only have one year contracts. hah!).

Well, they can still do it!

This is all common sense. Unfortunately, Blackberry management doesn't have that. For starters, Blackberry needs to get rid of this European mentality of over charging for everything, may be getting rid of CEO and CMO would do that. This is what Blackberry needs:

1) Price BB10 devices at a bare mimimum price so that Blackberry can survive for a long period of time. Even it doesn't make a dime that doesn't matter but it should be able to expand user base with lower priced devices and be able to meet expense as a going concern. Look at Amazon, they have hardly made any for the last decade but the company keeps growing.
2) Blackberry needs to make its BB10 keyboard devices very similar to BBOS devices. In short, BB10 keyboard devices should have all the benefits of BBOS but also improvements of BB10, like browsing, apps etc. If they do this and have a device which is reasonably priced then Blackberry has a very high chance of converting most of its existing user base to BB10.
If Blackberry management can implement these simple changes, Blackberry can come back big time but it seems this management just wants to sell the company at this point, freaking bunch of morons.

Duh? European mentality is not to overcharge for everything. The German car industry is a good example, they sell cars all over the world but: premium cars for premium prices. Which people are obviously willing to pay. Germany is the 2nd largest exporter in the world and the 3rd largest economy with only 80 Million population. However the Z10 was not considered premium by many, hence the premium pricing didn't work. The image didn't correspond with the product and price. And yes, as a German, I have to admit, we have people who make bad decisions too and sometimes export them to other countries (TH).

Couldn't agree more but I have to defend Germans (You :). Not only Germany has people who make bad decisions. The bad decisionmakers are in every single country on Earth.

The problem is that there are millions of people all around the world who are willing to be hired just to make bad decisions or let company go bankrupt.

It's not about the nationality. It's about CHARACTER.

Wow, very insightful. I hope BlackBerry can take from this article and move forward

Posted via that z10!

Look up in my posts, I am saying this for several months now, since early Summer.
Top handset (Z30) should be around $400-450 and Z10 should be positioned at $300 or less.
Same goes for the Q10 and Q5, with $50 added to Q10 (let the keyboard lovers pay.)

Yup, but Blackberry management is still pricing their handsets too high. This can only be done if someone comes from outside.

Gil Amelio was worse for apple than sculley. In some ways sculley was ahead of his time, championing the "universal communicator" (the failed Apple Newton) before the market was ready. At a time when Jobs was saying "real computers have keyboards", sculley was thinking about applications for mobile computing. Whatever damage he did to apple, he was at least a futurist. First thing Jobs did on his return was kill the Newton (and decide that his company, Next, would be the backbone of OSX instead of the arguably-superior BeOS)... the rest is history. hard I guess to argue with hindsight.

RitalinHum:: C001211E2

You have to remember not everyone will jump ship for a $299 price just to get a device for $299. Also most smartphone user are using devices that have memory card slots and are still not ready for the "cloud" so I say lets sit back and watch and see what happens.

As much as I hate to admit it Point taken and should be considered as for prices wouldn't matter as I'm an avid but to attract new consumers or previous faithful customers who lost faith in Blackberry and finally it's blackberry should educate customers on how to use there Phones people nowadays expect to turn on a phone and use it like any other phone each OS is unique in the way it functions and lastly it seems a lot of people don't know the BLACKBERRY 10 products are new! They assume it's the same old OS! And yet releasing a blackberry 7 device might confuse some customers.

Posted via CB10

I just want to add that the Z10 can be bought new and unlocked for 350EUR at Amazon France.
I am pretty sure it is going to reach the 300EUR barrier soon. OF course we are 9 months from launch, but it's the time to get a couple of cheap Z10 to offer for Christmas (or sooner).

I have always thought they should have re branded. When I talk with people they say "oh blackberry. I had them a long time ago and I got to where I didn't like them ". People won't go back when they hear the name.

Posted via CB10

BlackBerry top executives all plan to make lots of money is they sell the company. I think it's over $80 000,000. With TH getting 50m of that. PW plans to lose his investment if BlackBerry sells to another company besides Fairfax. So what is PW to do? Well he brokers a deal with TH and the other top executives... He and two others on the Board of Directors approve in doubling and even tripling the compensation packages for the executives. They do this cause they want BlackBerry to sell the company to Fairfax so they can get there investment back, but before they buy it, PW gets TH to drive the stock price down low enough to make a good return.

Posted via CB10

This is most likely what happened considering that PW was the party in charge for deciding the 55 mil payday for TH. In the end, customers, developers and employees got screwed.

Posted via CB10 from BB Z10 (My stable: 8310, 8520, 9900, Z10)

"It’s true that you can’t sell a phone for $700 in most parts. Apple and Samsung might be the only two companies who can really get away with this right now."

Why? Why would consumers who are willing to pay $700 for device want to use Apple or Samsung only? When you pay premium price for premium device you want to differentiate. That's why there will be always room for other then Samsung/Apple brands in the high end cellphone market. It's called competition.

Yes. COMPETITION.

BBRY posed a threat to Apple, Google, Samsung and Microsoft. BBRY was unwanted competition not only in the hardware market but mainly in the OS market. Therefore certain measures had to be taken.

Hundreds of journalists and "analysts" were engaged to spread millions negative news on BBRY.

Puppets called Thorsten, Frank, Kristian, Mark were hired to make and execute the "right" decisions.

Billions of $ were used to manipulate/short BBRY stock price.

It’s really depressing for BBRY shareholders and users that things like that can happen.

A Lot of people don't consider the cost of R&D and marketing and how it adds to the "device" cost. So that device that cost $200 to make, now all of a sudden costs $350 when you consider the marketing costs per unit as well as any other additional costs. 40% markup on that and now you're looking at $500. I'm not saying BlackBerry is good at marketing whatsoever, and im not an advocate for a $700 device, but people have to stop with the sub$300 BlackBerry expectations. Talk about specs all you want but at the end of the day, the iphone 5/5s/5c is still a 1.3ghz dual core phone with 1gb ram and it will outperform any quad/octacore android phone out there because it's such a stable OS. Don't forget, those nokias that everyone says "put android on it and I'll buy" to date have been nothing more than 1.5ghz dual core with 2gb ram phones. So why is it that when it comes to z30 at 1.7ghz dual core, it now becomes a problem and is a "low end phone that should be sold at a low end cost". The Z10 was much quicker and more reliable than the N4, the Z30 will be quicker and more reliable than the N5. Anyway my point is that the z10 for example if it came out at $400 would have been perfect, Q10 at $500, Q5 at $250 those would have been great introductory prices. Then the Z30 at $500 as well.

Posted via CB10

I have been commenting on this since I bought BBRY stock, shortly after the release of the Z10. I really believe that Blackberry should price the Z10 in line with the iPod Touch. If we remember the past correctly the iPod is what saved Apple from extinction. The significant advantage Blackberry has with the Z10 is the ability to expand the memory, which Apple refuses to do, rather they prefer you to upgrade, and throw out you old device. Right now Blackberry is in the position to make the Z10 a very attractive device first, and a smartphone after the fact. They are being hampered by carrier bias, and the only way for BlackBerry to break through is to compete with the iPod touch. I Own the Z10, and having the ability to shop around later for a carrier allows me the time to find an affordable plan. I wanted the Z10 for the BB10 OS. I liked what I researched about this new operating system and the specs on the Z10 outperform the iPhone 5. I owned an old IPod touch that is completely useless due to Apple's disregard for their past consumers, and their inability/refusal to make their devices backwards compatible.... I can no longer download any apps onto my IPod, because the apps for my OS is no longer available in their app store. Looking at Blackberry, I have seen their interest in retaining their past consumers, and are still providing new apps for a legacy device. The Playbook is like a PC in that it has given tech geeks the ability to get more out of these tablets. While iPhone users dump money into upgrading their phones to the 5s for a color? ...which instantly disappears the moment you holster them into a protective case. The Z10 didn't focus on a color scheme rather left it upto the consumer's protective case preferences. Maybe Blackberry should offer a color case with every Z10 purchase? I'm just happy the Z10 has organized my life better than any other device I have ever owned.

Posted via CB10

Well said...but there is constraint.
Hard to sell it at a lower cost, since you need to buy large quantities of parts which in turn you will build large number of units but can't sell it at a large number.

Posted on my Z30 (kickass device)

" if this company can solidify its position in the market again"

I believed nothing can be solidified unless until they can liquify the very hard and solidified earwax in their eardrums...

see the userbase is shrinking, and even the NUMBER of comments here in crackberry is agreeing (seriously, just 20+????), maybe they are just busy with their non blackberry phones... sigh

Posted via CB10

Very valid points.
They need to seed BB10 hardware as much as possible. USA Carriers need to stop signing ridiculous mullti-year Apple rip-off contracts, forcing iPhones into people’s hands despite them not wanting them, and start talking to Carriers and assist them in advertisement and helping them sell BB10 phones in an honest manner.
The Galaxy Series irritate me, they are not high quality phones yet they are marketed as such, manipulating people into thinking they are buying quality. Samsung using Apple’s marketing techniques.

100% correct but I think BlackBerry will milk their core support for every dollar so therefore no savings for early adopters of BlackBerry 10 I fear. Of course I've seen many posts here about the high prices. I'm a little disappointed in the 700 cost of a Zed30 and, although I've been waiting to get one, I'm starting to have second thoughts due to the price.

I don't think I'm alone and if the prices of BlackBerry products don't start to fall in line with the demand I can only see demand shrinking even further.

Posted via CB10

@M2H4
Tagging along with these comments.
I might be alone in this opinion, fair enough. I agree that the time has come for lower prices in general - and especially concur with Chris about seeding Z10's at a bargain price now.

But I still disagree that BlackBerry should essentially start a fire sale and basically lose money on the devices (which would be suicide). I get that a lot of you guys are very focused on the $ sign. So how many Nexus phones has Google sold at their bargain rate? Because *literally* nobody I know has one. Iphones, samsung, LG, older feature phones, that's about it.

BlackBerry wants to project their brand as successful. The idea that under-pricing their devices will "help" their brand perception is just dumb, frankly. When you go to buy a nice pair of shoes, do you typically say "Wow - Walmart has these amazing shoes for $10 - they must be every bit as good as Cole Haans!!!"
No, you don't do that, because oftentimes in life you get what you pay for.

This is also because Cole Haan represents quality and expertise in their product in a way that Payless shoes do not.

I don't know if $700 is right for Z30, but it's not far off. Anyone here with an open mind will at least reconsider the philosophical basis of "cheaper equals better" that seems to be so popular.

Posted via CB10

When they launched the Z10 I'm pretty sure Thorston said it was being sold for $150. Did I hear that wrong?

 BBM Channel: TheGroupRide C00055B7C

Chris BlackBerry is giving away free phones to BES10 subscribers.

my families company does alot of eletrical work for Loblaws and i just got news that they were given Z10s and Q10s free, not sure if its just for large corps with many devices or all but i just got this info so i'm guessing LPL has setup a BES10 service. i do believe they were on BES with legacy phones but i guess they are upgrading now

I agree that Blackberry is trying to maintain a premium image, but in the era of BYOD they just need to get the phones out there!! This means lower price models for the masses.

I agree, Chris. In particular, I'd like to see BlackBerry really sell devices online. Not just an option to buy on the website for the already sold, but a real sales funnel. I hope to buy a Z30 directly from BlackBerry.

I agree with you about not pursuing increased margins on device sales in the short run. Going private will reduce some of the pressure to increase margins. But, I also think we might see cost per device increased because of lower volume, anyway. But, what I'd like to see is BlackBerry 10 devices with specs like flagship Android devices. That'll be low margin, but you can almost make the case that the contest for non-apple smartphone sales is heavily influenced by hardware specs...

I'm still buying a Z30 though. The call clarity and media support is what's tempting me.

Posted via CB10

As always, Well written Chris!!
Seems Blackberry is the only one that haven't reach that realization! Name changed but not to much else! Love BB still!

While seeding phones, they should send a free Z30 to each retail sales staff member that works for a carrier that carry's the phone, within the US and Canada. Get the phones into the hands of the people that are putting phones in customer hands.

I spent $600 plus tax, on my z10 6 months ago. There is no way I'm going to buy the z30 at that price. I'm sorry if I'm going to spend any more than $500 on a phone I would go galaxy.

Posted via CB10

Totally agree with Chris. They must use that written down inventory and use the whole lot of Z10s as ammunition.

Posted via CB10

I believe there is power in numbers and BlackBerry needs to increase the numbers in their user base. I am die-hard BlackBerry, but I don't know anyone with a BB10. This is very disheartening because I remember a time when all of my friends and family rocked BlackBerrys. Now, I can't even convince my wife to come back.

I think the user experience is what's keeping consumers away. BB10 is great, but without major apps people are willing to give it a try. I agree with a lot of posters here who believe that developers will flock to BlackBerry if the user base increases. For that to happen, BlackBerry has to seed the unsold Z10s and slash the prices of the Z30s.

Great article OP.

My BlackBerry History: 6510, 7520, 7100i, Storm 9500, Storm 2, Torch 9850, PlayBook 64gb, Z10...

Can't Agree more
This is tough time for BlackBerry and I really can't wait to see what will happened in the near future.

+1000 and I wish for Heins to have this editorial duct taped to his face.

-STV on Z10STL100-3/10.1.0.4780 TMO US

This guy nearly nuked Apple. So the only thing I take from this is sell BB for less money, come on everyone else can.

Good article. I agree. You should work for BlackBerry. It will take time to execute a business strategy and build back a broken brand. (going private may accelerate this). If BlackBerry can hang on as a brand for 2 more years it will survive.

Posted via CB10

Guys, Z10 official price in Dubai as of now off contract: AED 1099, some outlets pushing them out for AED 999 that's US$ 272

They would have sold by the truckloads for that price, however we also have a Middle East exclusive white/gold version of the Q10 which looks blingy and sells for $1000

Smart people sure do stupid things. There are very few who will pay $700 for a phone. Drop the price get them sold... do a trade in/trade up, REBUILD your user base, RELEASE BBM CROSS PLATFORM AND DESKTOP,and offer BES 10 the cloud on a subscription basis. WTF BlackBerry!

Posted via CB10

Now who will explain this this thing to Blackberry?? The Chief Marketing Officer is too stubborn to change his views. All over the world BB fans had been shouting about the hefty prices driving away people from BB since they think BB is not what it was 2 years back and would buy nothing but Apple or Samsung at such price. Everyone knows about it except the BB management. Sometimes I feel as if they intentionally want to sell the company.

Just bought Z10 @ USD270 effectively in Thailand.
Imagine what would have happened, if this was launch price.....
AIS (major carrier in Thailand) attended the mobile expo in bkk between 3-7 oct and and 8th oct was out of stock of BB10 devices after selling entire set for $315 a piece.
With financial benefit, people will overlook iOS and Android and give it a try, thats what needed coz they never marketed the device.
PLS PLS PLS someone make sure people in Waterloo read this. BB10 is great, make it appealing !!

Well said Chris. They need to get these out to the masses. Sitting in the warehouse does nothing to improve the situation. The more people using BlackBerry and finding out what a great phone they make is win win win for everyone. Also moving the inventory even at break even is better than what it is doing now. Rocking with my Z10...

Posted via CB10

My thoughts have been the same lower the product cost a dedicated business platform and concentrate on getting your user base back by sticking with business and enterprise.
Let Apple have the consumer market let
BlackBerry have the business

Posted via CB10

I have to say I don't care what this Apple CEO guy says, I just can't get over how creepy he looks in that picture.

Z10s are now going to be cleared at a very competitive price point and they are great phones. Also, at $19 CAL / year on BES10 this saves enterprise over $40 / year / user vs MDM competition, cuz security for the bb10 device is free. Although BlackBerry has failed at taking the consumer, it will survive in enterprise.

Posted via CB10

350 is a bit harsh for a new device. 350 for a Z10 is fine. for the Z30 - I would say 500 550 at most.

We have been crying hoarse about the pricing issue forever now... high time they listened... they are killing themselves.

Posted via CB10

As a customer we all know Blackberry has to bring the prices down on the new devices to be market.
But is Blackberry listening to this? WHEN WILL THEY LOOK IN TO THE REAL WORLD AND understand the market?

I agree. But, you also need to have a hardware that would be worth buying for the average person. Was on a site earlier today comparing phone specs and boy! Was I so blown away by what's out there in comparison to the BlackBerry. BlackBerry has a very very long way to go to redeem their image.

Posted via CB10

If they had done this at the beginning off the new bb10 they would have been fine instead they squandered a great opportunity. It really is basic economics.

It may be too late now for them to do this unfortunately

Posted via CB10

Great article Chris! When I took Economics 101, I learned about the PRICE DEMAND-SUPPLY curve, and how to maximize PROFIT. Here we have a situation where at the current pricing, sales are low. As price is lowered, we assume the sales will be higher and even though your margin per device is less, you are selling so many that you are still ahead (MAXIMIZING PROFIT). At some point, if you lower price too much... You will not reap any more profit and end up having less because your margin is too low.

So this is what happened with the Playbook debacle. They sold a few at high prices, but it wasn't until months later when they had the "fire sale" at $199, when I think they sold a huge number and seeded millions into the population. However, the Playbook ecosystem failed because it didn't morph into the BB10 ecosystem. However, if they can do the same for BB10 hardware it will seed users with the hardware to enable them to latch into the BB10 ecosystem and bring the numbers to encourage developers to continue making apps, carriers can more affordably sell the devices, and so on.

What must be stipulated here is that carrier pricing must also reflect the lower cost. If BlackBerry lowers the price, the carriers should not be making the extra profit, or if they do, only some of it (as an incentive to sell more BlackBerry phones). But at this point, if they can't get rid of the extra inventory it will just sit collecting dust in a warehouse and when they do finally sell it, months down the road, the interest may be even less.

So the big question is, if they cut the price of a Z10 in half (from $700 to $350), and the cost to make it assume $300, their profit per phone will go from $400 to $50. They would have to sell 8x more phones to keep the same profit. Even if they don't, would this be a good long-term strategy to put devices into hands of people to keep them loyal and in the BlackBerry circle for better profits in the future?

Look, it doesn't matter how much they charge, if they can't get BES10 working properly for the enterprise. Its woefully unreliable, and thats why corporations like my own, have not flocked back to BB. BES10 simply does not work reliably, even for corporate secure email! We re-signed with them, and still have not rolled out, even with teams from Waterloo down trying to get it working. How long has BES10 been out now? and its still not working properly?

Don't trust Schulley. He ruined apple. Even Jobs admitted later on it was a mistake to hire him. Guy only understands money.

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