12-24-13 05:56 PM
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  1. propeller10's Avatar
    source: BlackBerry smartphone strategy analysis: don’t chase low end | BGR

    Earlier today we posted a smartly argued piece of analysis from Wedge Partners analyst Brian Blair, who made a compelling case that BlackBerry should get out of the high-end smartphone market completely and move aggressively to target emerging markets with bargain-bin smartphones. While Blair made a lot of terrific points in his analysis, I found myself at the end unpersuaded that his advice to BlackBerry is the best course of action for the company to take.

    Here, in my non-expert opinion, are the biggest problems BlackBerry would face if it moved exclusively to the low-end market:

    First, no matter how cheap BlackBerry makes its devices, there will always be a no-name vendor willing to go even cheaper. For example, consider the Xiaomi Hongmi, an Android smartphone that released in China this year that features a quad-core 1.5GHz processor, a 4.7-inch display with a pixel density of 312 pixels-per-inch, an 8-megapixel rear-facing camera and a 2,000 mAh battery and that costs only $130 off-contract. You can be certain that Xiaomi is barely making any profit on every device it sells and is only able to stay in business by pumping out tons of these phones and aggressively selling them to consumers in emerging markets. And there are many, many more Xiaomis in emerging markets than BlackBerry could ever hope to keep up with.
    Second, Im unpersuaded that BlackBerry could make its keyboards that big of a differentiator to drive demand away from dirt-cheap Android phones. Yes, there are some diehards who still only want a phone with a full QWERTY keyboard but they are small in numbers and remind me of the people who used to argue that Betamax was obviously superior to VHS whatever the merits of their case, its pretty clear that theyve lost. The ship on keyboard smartphones sailed years ago and if there were still money to be made from mass-producing them you can bet that Samsung would be spamming out QWERTY-equipped editions of the Galaxy S4.
    Finally, I find myself unconvinced by Blairs suggestion that BlackBerry can make up its app gap with iOS and Android by only offering the very best and most popular applications and paying off the top developers to bring their apps to BlackBerry 10. The reason this makes little sense is simple: The app market is one of the most notoriously unpredictable markets that Ive ever seen. There is no way to know when the next big app will blow up after all, how many people were talking about Snapchat two years ago? And now its one of the apps that no serious mobile platform can do without. If youre always paying off big-name developers to bring their apps to your platform then that means youre always one step behind your competition. And given that theres no way to know whether todays hot app will still be hot in 6 months anyone remember Draw Something ? then devoting significant resources to bribing app developers is a very risky proposition.
    So what should BlackBerry do if it cant chase the low-end market? As I said, Im not an expert but I think the companys best shot at a turnaround is probably to go back to its roots as an enterprise mobile software company and forget about chasing the consumer market all together.

    The multiple scandals surrounding the NSA shows that theres still a significant need for secure mobile communications and weve read several reports suggesting that BlackBerry has been the one big tech company whose products the NSA has been unable to crack . If BlackBerry can pitch itself to NSA-wary companies and governments as the only surefire way to keep your communications secure then I think it could regain some of the traction its lost in the enterprise.

    What would such a company look like? Well it would be focussed primarily around cross-platform mobile device management and its hugely popular BBM messaging software. As far as smartphones go, the company would have to drastically cut down on the number of devices it makes and would basically only sell its own hardware as high-end items for CEOs and government officials who require the utmost security. This would mean giving up on making BlackBerry a be-all smartphone for mass consumers and would make it device used primarily for secure communications which, if you recall, is how the BlackBerry first became a status symbol in the first place.

    I honestly have no idea whether such a plan would really work or if the economics are even there to make it work in the first place. But doing secure mobile communications well is whats in BlackBerrys very basic DNA; trying to chase down scraps of cash by selling low-end smartphones is certainly not.
    JeepBB likes this.
    12-20-13 06:04 AM
  2. JeepBB's Avatar
    The original analyst's letter is in here, if anyone's interested.

    http://forums.crackberry.com/news-ru...anyone-885795/

    It's a novel piece of thinking for BB to go low-end, but I agree with everyone that it won't work for BB.
    propeller10 likes this.
    12-20-13 06:10 AM
  3. LoganSix's Avatar
    Here, in my non-expert opinion, are the biggest problems BlackBerry would face if it moved exclusively to the low-end market:
    But, they aren't moving exclusively to the low-end market. They are expanding to the low end market.
    BlackistheBerry likes this.
    12-20-13 09:28 AM
  4. mrfreeze's Avatar
    So Apple is low-end?

    Posted via CB10
    12-20-13 09:52 AM
  5. wildbanger's Avatar
    Expanding to the low end market? I thought BlackBerry has some low end devices

    BBM Channel C000FA856 | Z10STL100-3/10.2.1.1055
    12-20-13 10:07 AM
  6. propeller10's Avatar
    Expanding to the low end market? I thought BlackBerry has some low end devices

    BBM Channel C000FA856 | Z10STL100-3/10.2.1.1055
    Correction: overpriced low end devices.
    Poirots Progeny likes this.
    12-20-13 10:10 AM
  7. badiyee's Avatar
    Expanding to the low end market? I thought BlackBerry has some low end devices

    BBM Channel C000FA856 | Z10STL100-3/10.2.1.1055
    I see the entire thing as a reactionary move to counter Nokia's "flood the low end don't care if we take a loss" strategy. Basically I believe the first plan was to take the Q5 and flood it, but the problem was costs, and they can't mark it further down because they can't keep producing the Q5 at a loss.

    With the foxconn partnership, that may be possible. Remember though the Q5, if you take into considerating is quite appropriately priced if you look at the hardware and start to think of it as possibly-Android ready device.

    The question is how low can Foxconn make without upsetting the other major partners?
    12-20-13 10:12 AM
  8. scribacco's Avatar
    Expanding to the low end market? I thought BlackBerry has some low end devices

    BBM Channel C000FA856 | Z10STL100-3/10.2.1.1055
    z10 and z30 are low end compared to the other brands high end
    12-20-13 10:27 AM
  9. markus_13's Avatar
    I like this plan. It is where they are currently selling most phones as shown today with the BBOS numbers.

    It is not perfect but it is where they are still relevant and need a cheaper model to compete

    Posted via CB10
    12-20-13 11:37 AM
  10. JeepBB's Avatar
    I see the entire thing as a reactionary move to counter Nokia's "flood the low end don't care if we take a loss" strategy. Basically I believe the first plan was to take the Q5 and flood it, but the problem was costs, and they can't mark it further down because they can't keep producing the Q5 at a loss.

    With the foxconn partnership, that may be possible. Remember though the Q5, if you take into considerating is quite appropriately priced if you look at the hardware and start to think of it as possibly-Android ready device.

    The question is how low can Foxconn make without upsetting the other major partners?
    Nokia doesn't make a loss on any phone IIRC. Even the cheapy 520's made a (small, but positive) return on costs.

    I'm not sure that BB has the ability to make cheap phones to sell at a profit (see:Q5). I'm sure Foxconn can make phones cheaply, but there'll always be someone who'll undercut them with a no-name android phone. So, neat idea to chase the low-end, not sure if it'll pan out.

    We'll see.
    12-20-13 11:38 AM
  11. badiyee's Avatar
    Nokia doesn't make a loss on any phone IIRC. Even the cheapy 520's made a (small, but positive) return on costs.

    I'm not sure that BB has the ability to make cheap phones to sell at a profit (see:Q5). I'm sure Foxconn can make phones cheaply, but there'll always be someone who'll undercut them with a no-name android phone. So, neat idea to chase the low-end, not sure if it'll pan out.

    We'll see.
    No name Androids? I may have a hunch you are probably talking about android devices that may have MediaTek chipsets in them, as they are always marketted cheaply.

    Perhaps you are right, but I don't think that BlackBerry would take such a drastic plan to move (possibly) the entire manufacturing line to Foxconn just for kicks. It should be much more cost efficient for them to engage the low end market for BlackBerry somehow and somewhere along the distribution chain. All I know is that ASEAN (not to be confused with Asian) countries have a some sort of pact in regards to opening up trades and relaxing the tarriffs amongst each other member countries.
    12-20-13 12:15 PM
  12. Loc22's Avatar
    BGR generally do not know what he is talking about, he only knows iPhones perhaps he should keep his comments restricted to iPhones.

    Though I agree that the way to capture the market is to take to the low end as that is the market segment that has yet to adopt to a smartphone. The main reason for this is simply the price.

    If BlackBerry or any other manufacturers decide to take to the low end market, they may reduce their margins per device. Ultimately they will win the influence of device numbers, popularity, app developer preferences and ultimately total profitability. This profit does not only come from device sales, but it will also include profit on app sales.

    Posted via CB10
    12-20-13 12:37 PM
  13. Prem WatsApp's Avatar
    I'd rather rock a "Z5" or" Z3" or "Z1" low-end with BB10 by BlackBerry than a no-name China droid potentially with spyware on it, etc. Gingerbread anyone?

    In many Asian / ASEAN just the name BlackBerry itself still carries some prestige and will likely be preferred over droids, especially once they can load the Android apps.

    My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...
    12-20-13 06:16 PM
  14. Prem WatsApp's Avatar
    * Asian / ASEAN countries

    My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...
    12-20-13 06:17 PM
  15. badiyee's Avatar
    * Asian / ASEAN countries

    My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...
    Asian = Entire Asian continents. You probably can lump in Middle East countries into this, geographically, that includes India, despite being a continent of its own.

    ASEAN = Association of South East Asia Nations.

    Malaysia
    Indonesia
    Brunei
    Thailand
    Singapore
    Phillipines
    Myanmmar (known as Burma to us)
    Cambodia
    Vietnam
    12-20-13 06:33 PM
  16. garnok's Avatar
    I'd rather rock a "Z5" or" Z3" or "Z1" low-end with BB10 by BlackBerry than a no-name China droid potentially with spyware on it, etc. Gingerbread anyone?

    In many Asian / ASEAN just the name BlackBerry itself still carries some prestige and will likely be preferred over droids, especially once they can load the Android apps.

    My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...
    unfortunately in ASEAN especially in indonesia samsung is the top brand for mobile phone, and most android phone come with jelly bean 4.1 even if it just $90 android phone
    12-20-13 07:55 PM
  17. sixpacker's Avatar
    But, they aren't moving exclusively to the low-end market. They are expanding to the low end market.
    I must have missed his commitment to more high end devices. Where did he mention replacements for the Z and Q? Why didn't he market the Z30?
    The Z will be a year old soon and there is no commitment to an upgraded model.
    JeepBB likes this.
    12-21-13 02:39 AM
  18. LoganSix's Avatar
    I must have missed his commitment to more high end devices. Where did he mention replacements for the Z and Q? Why didn't he market the Z30? The Z will be a year old soon and there is no commitment to an upgraded model.
    The message from Chen was that he was working a deal with Foxxconn to build low end/cost devices. He didn't say he was going to stop making the high end Z or Q devices.

    initial focus of partnership to be development of a consumer smartphone for Indonesia and other fast-growing markets in early 2014
    The CEO doesn't market a phone that has already been released during a financial statement. He replaced the marketing department. He knows it was poor marketing.
    12-21-13 09:17 AM
  19. Rickroller's Avatar
    If BBRY thinks they can compete with something like the Moto G for $200 off contract then they are truly as dumb as I think they are...

    Sent from my Nexus 4
    12-21-13 09:46 AM
  20. darkehawke's Avatar
    But, they aren't moving exclusively to the low-end market. They are expanding to the low end market.
    i dont understand this.
    Blackberry has been predominantly low end for a number of years now.
    Thats why BB10 failed as it didnt cater to their biggest group of users
    garnok likes this.
    12-21-13 09:17 PM
  21. badiyee's Avatar
    If BBRY thinks they can compete with something like the Moto G for $200 off contract then they are truly as dumb as I think they are...

    Sent from my Nexus 4
    Moto G may be USD200, but when they arrive here (in emerging markets), guess what?
    They get 100% price increment. Yeap.

    Guess who make the cheaper phones here? (in emerging markets) Take some wild guesses. Chances are you may not be wrong.

    Secondly, how do you think they get priced so cheaply, by those "who make the cheaper phones here"?
    12-22-13 10:26 AM
  22. Poirots Progeny's Avatar
    I personally feel lower priced devices can only help bb reinvigorate itself. Sure, the q5 is supposed to meet that segment but it is too expensive and doesn't offer enough/differentiate itself enough from other devices, as mentioned.

    The moto g, lumia 625,nexus and all the other cheaper devices are selling. Bb needs to gain traction also - though i don't know what else they can do. The cheaper bbos devices are not doing particularly well in and of themselves.

    Its a tough one - i do feel bb10 is the path to pursue though!

    Sent from my RM-941_eu_euro1_231 using Tapatalk
    12-22-13 10:57 AM
  23. togarika's Avatar
    The original analyst's letter is in here, if anyone's interested.

    http://forums.crackberry.com/news-ru...anyone-885795/

    It's a novel piece of thinking for BB to go low-end, but I agree with everyone that it won't work for BB.
    I disagree with you on that. I don't have the figures with me but a simple inspection of BlackBerry phones I have seen around in emerging markets show a BlackBerry Curve is the most common phone around. Cheaper BB10 phones will sell in the emerging markets
    12-22-13 11:30 AM
  24. JeepBB's Avatar
    I disagree with you on that. I don't have the figures with me but a simple inspection of BlackBerry phones I have seen around in emerging markets show a BlackBerry Curve is the most common phone around. Cheaper BB10 phones will sell in the emerging markets
    Yes, they might sell cheap BB10 phones, if they can make them cheap enough to undercut the cheap androids and winphones that are increasingly eating BB's lunch.

    From what I've read, the main reason Curves do so well in those markets is due to BBM. Now that BBM is cross-platform, you have to ask why someone would choose a BB10 pseudo-Curve with its weak app ecosystem over an android phone which now has BBM and additionally has so, so much more on offer.

    If I was a price conscious consumer, often a kid, I know which phone would win the sales game. And it wouldn't be the BB10 cheapo phone.
    12-22-13 11:45 AM
  25. badiyee's Avatar
    Yes, they might sell cheap BB10 phones, if they can make them cheap enough to undercut the cheap androids and winphones that are increasingly eating BB's lunch.

    From what I've read, the main reason Curves do so well in those markets is due to BBM. Now that BBM is cross-platform, you have to ask why someone would choose a BB10 pseudo-Curve with its weak app ecosystem over an android phone which now has BBM and additionally has so, so much more on offer.

    If I was a price conscious consumer, often a kid, I know which phone would win the sales game. And it wouldn't be the BB10 cheapo phone.

    I might add BBM on BIS data packages.
    12-22-13 12:11 PM
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