When I had earlier spoken out in favor of Canadian smartphone maker Research In Motion Ltd (NASDAQ:BBRY)’s prospects in emerging countries, there was a small condition attached – the company had to get the pricing and promotion right. While the promotional part was taken care of, the pricing strategy went horribly wrong.
The shocking price tag
Let’s face it. Research In Motion Ltd (NASDAQ:BBRY) smartphones are still a big draw among young consumers in cost-conscious markets such as India and Indonesia. This is mainly due to the company’s widely popular Blackberry Messenger Service (BBM), coupled with affordable data plans. That’s precisely why I still can’t fathom the logic behind the company’s decision to stick to a near-$800 price tag in India for an otherwise widely anticipated and aspirational phone – the Research In Motion Ltd (NASDAQ:BBRY) Z10.
Come to think of it, even two of rival Samsung’s best-selling high-end phones, the Galaxy S III and the Note II, are priced considerably lower than that. And if CEO Thorsten Heins and company are waxing eloquent about the product being an absolute sellout, let’s not forget the small amount of phones shipped initially – a common industry strategy to boost demand.
Blackberry’s loss is Nokia’s gain
Getting the pricing wrong when you just have one product to show up for your efforts since 2010 is marketing hara-kiri for a company that derives about 65% of its overall revenue from countries other than the US, UK and Canada. That again provides one more reason to celebrate for another smartphone laggard Nokia Corporation (ADR) (NYSE:NOK), that has made quick and successful inroads into emerging markets with its largely sub-$200 ‘Asha’ range of touchscreen and qwerty-enabled phones. At the same time, Nokia Corporation (ADR) (NYSE:NOK) has already carved out a clever marketing strategy where its more high-end Lumia range of phones are already selling at different and more affordable price points.
A bleak US scenario
Coming back to the US which makes up for about 19% of Blackberry’s earnings, all eyes are focused on the Z10’s March 22 AT&T Inc. (NYSE:T) launch. That’s because the company witnessed a rapid fall from grace since the 2007 launch of Apple Inc. (NASDAQ:AAPL)’s iconic iPhone, with roughly a 44% fall in market share, as per data from research firm IDC. On the other hand, the iPhone commands around 51% market share, with another around 44% attributed to Google Inc (NASDAQ:GOOG)’s Android-based phones, as per Kantar Worldpanel. With that in mind, a delayed launch of its newest and best product in the US, for whatever reasons that might be, is hardly a reason to feel comfortable about Research In Motion Ltd (NASDAQ:BBRY).