[jechow]

I was wondering if RIM should make zero margin on their new BB10 handsets in order to flood the market with affordable handsets and increase adoption of their new platform. Hopefully, they can make it enough money from carriers (BIS and BES fees). This would be similar to Android's business model. What do you think?

[eve6er69]

This would be a decent thought if they had enough money.

They are desperate for cash right now and they're already negative in hardware cash so this would put them further.

I think they should work with carriers to allow an early upgrade to every current blackberry user to get the devices in hand so people like me don't have to wait a year and a half for a new upgrade.

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[James Nieves]

no...
If anything they need to seed OS7.1 devices for free along with playbooks FOR FREE to enterprise users to KEEP THEM until BB10, where they sell phones likfe everyone else and try to make money. I suspect that the carriers are in support of BB10 and they will push to sell it as much as BB. If anything lower the fees because the carriers are gripping and use that to leverage carrier subsidy for the BB10 phones making them competitively priced/

But that risks them cutting out their main source of revenue right now...

[howarmat]

with the way the company's financials are currently, no this would be bad idea.

[DenverRalphy]

Shareholders are already screaming for heads. Make no money, and they'll probably get them.

[Ben1232]

Not if they want to stay afloat OP.

Better to advertise to get them out there and get people to pay a premium for a premium device.

[_StephenBB81]

You can't run a manufacturing company by looking for all your profits from service.

the Service fees are important, but once you set a price precedent it is much harder to raise it as you try to get more profitable

RIM can't heavily discount to the carriers, then the following year sell them the next gen device at 30% more so they can start making margin.

RIM's better solution would be to work with carriers on volume discounts for devices, AND services, to work with the Carriers for MORE BlackBerry specific plans, International travel plans that take into account RIM's data compression, low cost prepaid plans, BBM only plans etc.

RIM can't fight the price war against Android OEM's they need rebuilt relationships and ad value services the difference of $50 on a $600 phone doesn't matter to the consumer much, but to RIM's bottom line it sure does

[Pete6]

RIM cannot run a phone business with no profit. That would be plain stupid.

What they could do is to offer new users a special offer for, say, the first six months after launch. They could also offer an upgrade special when your contract expires. Tey could do something like a $200 phone for $100 on contract.

By doing this, RIM would attract many new users and they would be looking after their exixting customer base.

Obviously the corporate world will be deeply discounted but even there, the carriers still have a say.

If RIM did this then they might avoid dropping their carrier fees.

[lnichols]

Do we even know if BIS will be used in BB10 to get fees from carriers on services? We know that BES doesn't work with it and businesses will have to buy a new server for BB10 (which I don't see a lot of them doing). RIM needs to ween itself from service fees, IMHO, and make money on hardware and content fees. People and carriers no longer expect to have to pay extra to get email, Instant Messaging and Internet on a smartphone.

[rdkempt]

It also makes them look like a cheap alternative to a more expensive phone. It would ruin the brand a little bit to release "affordable" hardware. It's already happened to the PlayBook. "I'm here to buy a tablet.", "Ok, we have the iPad which is the best (and most expensive) tablet... but if you can't afford that, we have these other cheap ones in this corner."

Is BlackBerry a premium brand, or is it the cheap alternative to premium brands?