Rating: BB10 device needs to be priced as either premium or mass market
Industry pundits are waiting with bated breath to see what RIM will actually do when it announces its long awaited BlackBerry 10 device (probably called the Z10) or devices today [January 30th 2013]. However, Malik Saadi, a principal analyst with Informa Telecoms & Media believes that RIM will struggle to serve its two masters: – the developed countries in North America and Europe and the emerging markets. Saadi argues the BlackBerry Curve has enabled RIM to attract a large audience in the other regions, mainly young professionals and students. If RIM is to target the same audience in these emerging markets, the new BB10 device should not be priced higher than US$250, Saadi says. That, of course, is unlikely to happen if RIM is to rebuild its image as a supplier of premium smartphones.
In a separate report earlier today here, GoMobile News reported that in the UK, a BB10 device will probably cost at least $360 on contract, let alone SIM free.
Whatever the price, Saadi predicts RIM will struggle to sell large numbers of a BB10 smartphone as there is always consumer and sales rep resistance to a completely new experience.
Saadi point out that each time a new platform is introduced the actual numbers shipped are low.
For example, in the first three months after they were launched, the actual shipments of iPhone, Android and Windows Phone devices did not exceed 1.1 million, 0.8 million and 0.9 million, respectively.
RIM should therefore aim to sell at least one million units of a BB10 in its first quarter after launch. Anything above 3 million units would be a spectacular.
In order to regain investor confidence and rebuild its brand, RIM will obviously push its BBM messaging platform and its e-mail services with BB10.
However, to compete in emerging markets, there has been a significant drop in BlackBerry’s average selling price (ASP).
It has fallen from $280 in 2010 to $200 in 2012 (see chart). So this begs the question of how RIM will be able revive its fortunes in its home market of North America whilst still maintaining the support it has received from emerging markets.
Performance of BlackBerry smartphones, 2010-2012
| 2010 | 2012 | |
| Share of total smartphone sales | 14% | 4% |
| BB sales (million units) | 37.0 | 27.5 |
| Share of emerging markets | 25% | 47% |
| Share of developed markets | 75% | 53% |
| Global ASP (US$) | 327.0 | 235.0 |
| ASP in emerging markets (US$) | 280.0 | 200.0 |
| ASP in developed markets (US$) | 343.0 | 266.0 |
Source: Informa Telecoms & Media
