An Example of Horrible Pricing Strategy – Blackberry India’s BB10 Pricing

I must start this article by stating that I have been using a Blackberry for the past 10 years and I will continue to use one for the foreseeable future. It’s only using a Blackberry that I can punch out a 3 page email in under 5 minutes flat and I still receive emails on my Blackberry faster than any of my friends and while my friends may make fun of my “oh-so-yesterday” device – I am not one to jump ship on someone so quickly.
So while I may not be in the market for a new device as of now, I eagerly look forward to new Blackberry devices, hoping, praying and wishing that they finally get their marketing plans right and give the market what it really wants. The company has been doing very well under interim CEO, John Chen, by focusing its efforts on the enterprise market, promoting its QNX platform and launching new phones in partnership with Foxconn at multiple price points in the overcrowded smartphone market as it looks at selling its devices to the 85 million strong community of BBM users to buy its phones (BBM is available cross platform now)
These changes have definitely helped the company’s fortunes as the struggling smartphone pioneer delivering Q1 results that have surprised the market and the stock rallied 34 percent in the month of June 2014. The company launched a low cost device in Indonesia call the Blackberry Z3 (which is now getting available in all markets) and has announced a partnership with Amazon that will bring the Amazon’s appstore to Blackberry and allow the enterprise device maker to focus on regaining leadership in its core market.

 

Blackberry’s India strategy for the pricing of its devices is bewildering and confusing though. First they launched the Z10 device in 2012 at the same price-point as an IPhone which almost guaranteed the failure of the devices launch. Later on, it priced the Q10 and Z30 phones at even higher price points (oddly the Z30 was priced at almost the same price as the Z10 when it was launched) which only led to a faster exodus of Blackberry’s customers to rival phone makers. However, the Z3 was going to be its game changer, I likened it to the Blackberry Curve that was an instant hit with young professionals and teenagers and expected Blackberry to launch that phone at the same price point it had launched this phone in Indonesia of under $200.

 

However, whoever did the research and decided the price point for this device be put at Rs 15,990 made a grave and fatal mistake. For starters Z3 is priced Rs. 1000 less than the Z10 device and Rs. 9,000 less than the Z30 device. A comparison between all 3 devices is available here and it is clear that the Z3 is going to cater to the mid to low segment of the smartphone market and with that assessment I agree with Anupam Saxena of Times of India and Nandagopal Rajan of Indian Express who have given the phone good reviews but complain about the phone being priced out of the market.

 

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The Z3 at Rs 12,000 would have offered a very compelling and competitive case for those looking for low cost Android phones in a price sensitive market like India. Alas, Blackberry India has made another pricing and positioning error and this is extremely disappointing for a Blackberry enthusiast like myself. I request BlackBerry’s team to convene a meeting with its sales and marketing team (separately and then jointly later) and find out the acceptance of Rs. 15,990 for the Z3 in the market – they will be surprised and will be forced to react faster than they ever have before.