After a month of launch of BlackBerry Z10, cheaper tariffs are offered for UK customers- Is this the reason of short demand for BB10 phones?

Glenn

Company formerly known as RIM, has taken so long to introduce its next generation for OS platform and awfully they are performing adversely with their first BlackBerry 10 handset, Z10. Z10 has been launched in UK at the end of January and in Canada in early February, this year. And some after a month of its launch, UK market is hearing of price cut offs on the handset tariffs. It is clearly indicating that the demand of the device is not so strong and the device is not competitive to survive against iOS and Android phones.According to the Telegraph report, both Vodafone and Carphone Warehouse have slashed tariffs. It also seems that Phone 4u is proffering much cheaper deals. BlackBerry BB10 was launched to make an attempt with its sliding smartphone to change the fortune against the gains like Samsung Galaxy SIII and iPhone. However, in Q4 the market share of BlackBerry is fallen by 3.5% according to the report issued by Gartner’s analyst. The market share of BlackBerry in 2011 Q4 was 8.8% and iOS and Samsung has taken over with 52% of the smartphone sales in the Q4 of 2012.

Carphone Warehouse was initially offering the BlackBerry Z10 of £36 per month which is now down as £29 per month, included with tariffs included £29 up front free for the phone. Similarly, Vodafone has decreased their price deal from £129 to £33 per month which offers £129 up front fee. Same story is dictated by Phone 4u which has decreased their rates from £36 to £29 per month for their tariffs offers. Phone 4 u is also offering much cheaper tariffs with higher up front free and charging £20 per month, according to the report by Telegraph.

James Faucette of Pacific Crest shared with Telegraph that Z10 is moving away from the highest margin segment of smartphone business. He said that we believe meaningful price cut downs soon after the launch and this will bring Z10 in the mid-tier device with low gross margins.

In the bottom line, cheaper deals for mobile tariffs may not prove to be fruitful for the BlackBerry in the long term. it may result in creating hype in consumers to buy phone and prove to little enhance the sales of device in short term, but no promising sales is defined in long run. At the same time, all the vague and non quantifiable statements are not going to help RIM in digging out the smartphone doldrums.

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