Research In Motion Ltd (TSE:BB) (NASDAQ:BBRY) has announced its pricing plans for its new smart phone, the Blackberry Q10 in the United States, and the number signals the company is trying something different in the industry, trying to change the precedents set by the company by charging more for their product.
The strategy is certainly a risky one. According to Research In Motion Ltd (TSE:BB) (NASDAQ:BBRY) the Q10 will cost $250 in the United States for customers who sign up to a three year contract. Currently, users who sign up to the same contract can get the latest Apple Inc. (NASDAQ:AAPL) smart phone, the iPhone 5, for $200. One analyst, quoted by the Financial Post, sees the strategy behind the company's pricing.
The choice is a deliberate one, and it's one that might just work out for Research In Motion Ltd (TSE:BB) (NASDAQ:BBRY). The company wants the Blackberry Q10, which comes with a full Qwerty keyboard, to be a phone for businessmen rather than for the average consumer. The pricing denotes a consistent strategy at the Canadian firm, and it could be seen as a good one by the market.
The phone, which is a throwback to models like the Blackberry Bold, that Research In Motion Ltd (TSE:BB) (NASDAQ:BBRY) has had considerable success with in the past, will become available in the United States at the end of May 2013. Its pricing will turn off most customers, but that's true of its design as well. Market research shows that consumers simply aren't interested in full keyboard phones en masse.
Research In Motion Ltd (TSE:BB) (NASDAQ:BBRY) isn't trying to compete with Apple Inc. (NASDAQ:AAPL) for the whole market. The company is a specialty phone maker. It's trying to sell a very specific product to a very specific market, something that might be welcomed by consumers frustrated with a one size fits all take on smart phone design championed by Apple Inc. (NASDAQ:AAPL).
In order to achieve this, Research In Motion Ltd (TSE:BB) (NASDAQ:BBRY) needs to avoid the impression that it is competing with Apple Inc. (NASDAQ:AAPL) directly, and that's exactly what it's done with its pricing. Business customers have more discretionary spending money, and their phones are quite often purchased with company cash.