Why BlackBerry phones are over-priced and behind spec

Because BlackBerry does not have the purchasing power to reduce costs through high volume purchases (unlike their primary competition). And, as well, they do not manufacture very much of their devices' internal components (unlike their primary competition).

BlackBerry is the smallest player in this field, by a huge margin. How do you expect BlackBerry to release handsets at the leading edge specifications but at the current top-line price of $700? They can't because they can't achieve savings on volume purchases or self building their own parts. This is why the company is not leading edge: they simply can't do it due to their small size and their reliance on external manufacture of handsets.

This is the primary reason why BlackBerry is in such a losing battle to compete on hand-set manufacture versus: Microsoft, Apple, Samsung. BlackBerry doesn't have the financial wearwithawl to compete in the handset business. It's simply not feasible unless a company's who's financial backing would allow it too. Read: Google>Motorola or Microsoft>Nokia.

My solution would be to just focus on their mobile computing strategy. As the world gets more connected with privacy becoming more at risk, being the leader in providing a secure management of all the devices we use - on increasingly reliant basis - in a secure manner might be an attractive service offering. Albeit, at a significantly smaller scale.

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Originally Posted by mkwb

Because BlackBerry does not have the purchasing power to reduce costs through high volume purchases (unlike their primary competition). And, as well, they do not manufacture very much of their devices' internal components (unlike their primary competition).

BlackBerry is the smallest player in this field, by a huge margin. How do you expect BlackBerry to release handsets at the leading edge specifications but at the current top-line price of $700? They can't because they can't achieve savings on volume purchases or self building their own parts. This is why the company is not leading edge: they simply can't do it due to their small size and their reliance on external manufacture of handsets.

This is the primary reason why BlackBerry is in such a losing battle to compete on hand-set manufacture versus: Microsoft, Apple, Samsung. BlackBerry doesn't have the financial wearwithawl to compete in the handset business. It's simply not feasible unless a company's who's financial backing would allow it too. Read: Google>Motorola or Microsoft>Nokia.

My solution would be to just focus on their mobile computing strategy. As the world gets more connected with privacy becoming more at risk, being the leader in providing a secure management of all the devices we use - on increasingly reliant basis - in a secure manner might be an attractive service offering. Albeit, at a significantly smaller scale.

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...unfortunately a giant operating system/tech company did not purchase BB, it's just a vulture 'investment firm', which will dissect BB literally for what it's worth. to the penny.

Do you have some data to back this up? I've always thought that BB's component cost was reasonably in line with industry standards, and that their pricing was actually the result of an attempt to compete as a "premium" product like the iphone - as well as maximize profits from a relatively small marketshare.

Although economies of scale would absolutely affect them - especially at the lower end of the market, I didn't think it was the true driving mechanism behind their pricing. I'd definitely like to see your numbers though!

What do you mean by "data to back this up"?!?

Its obvious that BBRY doesn't have much purchasing power. Just look at the falling nimber of devices they make.

As for specs and price, just look at the prices of SGS4 and iPhones, compared with the Z10.

Its common knowledge that the Z10 specs are 1 1/2 years old. It uses a screen and processor introduced a year and a half ago.

The Lumia 920 had almost the same specs as the Z10, came out at the same time, and has already been replaced and succeeded by a newer model: (The 928). That really says it all...

Originally Posted by CrackedBarry

What do you mean by "data to back this up"?!?

Its obvious that BBRY doesn't have much purchasing power. Just look at the falling nimber of devices they make.

As for specs and price, just look at the prices of SGS4 and iPhones, compared with the Z10.

Its common knowledge that the Z10 specs are 1 1/2 years old. It uses a screen and processor introduced a year and a half ago.

The Lumia 920 had almost the same specs as the Z10, came out at the same time, and has already been replaced and succeeded by a newer model: (The 928). That really says it all...

That is only proof of greed, arrogance that the brand is still viewed ironically, and pricing incompetence, not that they can't. Obviously they can't make it as cheap, but they also are trying to make way too much per device when they need to get a healthy Bb10 user base. What are we talking here, $20 per unit for quantity savings? Also BlackBerry was churning out over 13 million devices a quarter at one point, but now are below six because they are slow and had a miserable launch if a new platform. They backed themselves into a corner and do nothing to get out.

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Originally Posted by CrackedBarry

What do you mean by "data to back this up"?!?

Id guess they are after the BOM (bill of materials) costings. this IS publicly available.
For the Z10 the BOM is roughly $154, for say an iphone5 it was $139.20.
It should be noted that its not just about the BOM costs, but also the `conversion` costs, or in better terms the costs to turn it from components to a product on the shelf, but in terms of specs it would directly affect the BOM costs.

BlackBerry Z10 teardown reveals a higher BOM than Apple's iPhone 5 | ZDNet

Originally Posted by lnichols

That is only proof of greed, arrogance that the brand is still viewed ironically, and pricing incompetence, not that they can't. Obviously they can't make it as cheap, but they also are trying to make way too much per device when they need to get a healthy Bb10 user base. What are we talking here, $20 per unit for quantity savings? Also BlackBerry was churning out over 13 million devices a quarter at one point, but now are below six because they are slow and had a miserable launch if a new platform. They backed themselves into a corner and do nothing to get out.

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Well, you're absolutely right that the high prices of BBRY phones are a result of deliberate policy. Even if BBRY paid 30% more for their components, which is unrealistic, the total cost would be 45$ per phone. So clearly there is a lot of room for lower prices.

The bigger problem is, that their small size restricts their ability to get the best components. I'm sure BBRY would have liked to put a better and faster CPU in the Z30, rather than a warmed over, slightly faster version of the Z10 CPU, but Qualcomm had to limit availability of their fast S800 CPU to only their biggest client because of the big demand.

Screens are also affected by this. Which is why we get an old Samsung AMOLED display in the Z30.

Blackberrys rollout of the Z30 however, certainly indicates that there IS something wrong with BBRYs engineering department and how fast they can roll out new models....

Its being introduced over 4-8 weeks, and BBRY can't even announce a US release date yet. That seems to indicate that they didn't have time to build up stock, which means that production only started recently.

(If the design was finished, say four months ago, it wouldn't make sense for BBRY not to start production sooner, so they can build up stock. This isn't related to greed, but more likely engineering's inability to execute.)

The Z10 was launched in January/February, but we know it was delayed for a number of months because of the OS not being ready. We also know that the Z10 was basically a slightly refined/modified Blackberry A/B, so the design was basically finished some time late Q3/early q4 last year.

That it means it took almost a year for Blackberries engineering department to finish the Z30! That is a LONG time, much too long, considering the screen res. and camera is the same, and the CPU is the same model, which just received a small speed bump. It's not like they took a year to design a phone from scratch!

In comparison, The Nokia Lumia 920 has many of the same specs and hardware as the Z10, was designed and launched at close to the same time, and the successor the the Lumia 920: The 928 is already on the shelves and selling in the US.

HTC, which is also a struggling company roughly the same size as Blackberry recently launched a new phone in 3 months. From design to finished spec and launch in THREE months.

So I'd say that it's pretty obvious that BBRYs engineering department is much too slow, and probably suffers from the same malaise affecting the rest of the company: A lack of ability to execute.

Originally Posted by CrackedBarry

Well, you're absolutely right that the high prices of BBRY phones are a result of deliberate policy. Even if BBRY paid 30% more for their components, which is unrealistic, the total cost would be 45$ per phone. So clearly there is a lot of room for lower prices.

The bigger problem is, that their small size restricts their ability to get the best components. I'm sure BBRY would have liked to put a better and faster CPU in the Z30, rather than a warmed over, slightly faster version of the Z10 CPU, but Qualcomm had to limit availability of their fast S800 CPU to only their biggest client because of the big demand.

Screens are also affected by this. Which is why we get an old Samsung AMOLED display in the Z30.

Blackberrys rollout of the Z30 however, certainly indicates that there IS something wrong with BBRYs engineering department and how fast they can roll out new models....

Its being introduced over 4-8 weeks, and BBRY can't even announce a US release date yet. That seems to indicate that they didn't have time to build up stock, which means that production only started recently.

(If the design was finished, say four months ago, it wouldn't make sense for BBRY not to start production sooner, so they can build up stock. This isn't related to greed, but more likely engineering's inability to execute.)

The Z10 was launched in January/February, but we know it was delayed for a number of months because of the OS not being ready. We also know that the Z10 was basically a slightly refined/modified Blackberry A/B, so the design was basically finished some time late Q3/early q4 last year.

That it means it took almost a year for Blackberries engineering department to finish the Z30! That is a LONG time, much too long, considering the screen res. and camera is the same, and the CPU is the same model, which just received a small speed bump. It's not like they took a year to design a phone from scratch!

In comparison, The Nokia Lumia 920 has many of the same specs and hardware as the Z10, was designed and launched at close to the same time, and the successor the the Lumia 920: The 928 is already on the shelves and selling in the US.

HTC, which is also a struggling company roughly the same size as Blackberry recently launched a new phone in 3 months. From design to finished spec and launch in THREE months.

So I'd say that it's pretty obvious that BBRYs engineering department is much too slow, and probably suffers from the same malaise affecting the rest of the company: A lack of ability to execute.

I too have a feeling that the general mindset in blackberry is one of relaxed approach and status-quo....but just a thought, obv i dont work there. One thing i think is worth pointing out is that BB10 was a whole new platform and also the fact that blackberry prolly expects less sales than their competitors so margin per phone has to be higher for payback. Either way, the price drop should have taught blackberry some very strong and lasting lessons but that also doesn't seem to be the case.....you dont lead with a flagship on a new os nowadays, you dont need hindsight, you just need managerial sense. If you want people to come over to the network they need a cheap and cheerful introduction (realasing a low range z5) and then a flagship for enthuisiusts who have done the research....imagine if instead of releasing the latest OS 7 phone they released a low cost z5 alongside the z10.....that would have probably allowed for greater penetration of BB10 into the market...again just a thought with no real number to back this up.

Originally Posted by CrackedBarry

The bigger problem is, that their small size restricts their ability to get the best components. I'm sure BBRY would have liked to put a better and faster CPU in the Z30, rather than a warmed over, slightly faster version of the Z10 CPU, but Qualcomm had to limit availability of their fast S800 CPU to only their biggest client because of the big demand.

Not really. Qualcomm pretty much fills orders in the order it receives them. Minimum orders are in the hundreds of thousands, not millions, and Qualcomm will fill those orders. Frequently, Qualcomm will refuse orders for too many units, because it would overwhelm their supply and their entire supply would go to one company, which Qualcomm doesn't like. They kind of like being able to parcel out supply of their latest. Xiaomi's business model is dependent on them being able to get the latest and greatest, but not in huge quantities. The way they work is, the initially price the phone at cost or loss, and sell a few hundred thousand units. The limited quantity creates huge buzz as they make announcements like, "we've sold our initial stock in 3 minutes!!! We'll have more in 3 months" They then wait until prices for the components drop, and then sell larger quantities at a profit.

Originally Posted by CrackedBarry

What do you mean by "data to back this up"?!?

Its obvious that BBRY doesn't have much purchasing power. Just look at the falling nimber of devices they make.

As for specs and price, just look at the prices of SGS4 and iPhones, compared with the Z10.

Its common knowledge that the Z10 specs are 1 1/2 years old. It uses a screen and processor introduced a year and a half ago.

The Lumia 920 had almost the same specs as the Z10, came out at the same time, and has already been replaced and succeeded by a newer model: (The 928). That really says it all...

Comparing iphone specs? C'Mon man. Z10 specs are far superior if you want to talk specs. 20% faster processor, better battery life, better screen resolution, better screen size. The specs and price is far from the issue, but nice try.
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