Problems may be continuing for Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) in spite of the company’s best efforts to claw its way back to the top. Pricing is a big concern for analysts, and statistics seem to indicate that Windows Phones are outselling the new BlackBerry devices.
Will Research In Motion Ltd (BBRY)'s High-End Price Tag Be A Problem?
At this point, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) appears to be in a predicament similar to what Apple Inc. (NASDAQ:AAPL) has faced over the last year or so. Its new BlackBerry devices, the Z10 and the Q10, only address the high-end smartphone market. As such, the company appears to be losing ground in many markets, particularly in one key market that the company had been touting as one of its best—India.
A comment from Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s India managing director Sunil Lalvani made recently was aimed at quieting concerns over the company’s loss of market share in India. However, the comments are also causing concerns for investors.
Research In Motion Ltd (BBRY) In India
“Market share is a bit misleading since we do not have phones in the sub-$100 segment, which makes some of our competitors’ market share seem large,” he said according to Live Mint’s Leslie D’Monte.
He went on to say that they agree it took too long to transition the old BlackBerry 7 platform over to the new BlackBerry 10 platform, but he said “the response to Z10 globally and in India has been good.”
Analysts who specialize in India’s smartphone market say they believe the price point of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s BlackBerry devices is just too high, especially in emerging markets where low-cost Android phones hold a commanding lead. Convergence Catalyst founding partner Jayanth Kolla told D’Monte that the success of BlackBerry 10 in India depends on whether the company expands its portfolio to offer devices in the $150 to $300 range.
Of course it’s worth noting that Research In Motion is planning the release of the BlackBerry A5, which is expected to have a lower price point, although the company hasn’t announced what that price will be.
Will BlackBerry Services Save The Day?
According to Lalvani though, they don’t want to address all smartphone segments. He believes there will always be plenty of room for high-end handsets and underlines the company’s BlackBerry Enterprise Service 10 and BlackBerry Messenger. He said Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is no longer “just a handset maker.”
The numbers indicate that the BlackBerry maker is indeed beginning to depend more and more on service revenue. Hardware fell from 75 percent of its business a year ago to 60 percent now. Services revenue now makes up 35.3 percent, compared to 22.1 percent of its business a year ago.
But some analysts are questioning whether services will be enough to save BlackBerry in a market that’s increasingly price sensitive.
BlackBerry Vs. Windows Phone
There are also some indications that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s Lumia 928 may be selling twice as fast as the BlackBerry Z10 on the Verizon network in the U.S. WMPoweruser’s Surur notes a tweet from AdDuplex’s Alan Mendelevich, who says Verizon appears to have sold more Windows 8 Phones than AT&T, probably because of the release of the Nokia Lumia 928.
The site also looked over reviews of these devices left by buyers of these devices. It looks like in 79 days on the market, only 197 people reviewed the BlackBerry Z10, which is about 2.5 reviews per day. The BlackBerry Q10, which has the trademark BlackBerry keyboard, hasn’t been available in the U.S. for long enough to get anything near an accurate measurement. The Nokia Lumia 928 garnered 143 reviews in just 24 days, which is about six reviews per day.
Statistics Favoring Windows Phone Over Research In Motion
There are also other, more concrete signs which indicate that Windows 8 phones may be overtaking BlackBerry. Jefferies analyst Peter Misek said his surveys indicate that 48 percent of those he surveyed saw Windows Phone as the third ecosystem behind Android and iOS, while 43 percent saw BlackBerry as the third ecosystem.
Other statistics show that there were more Windows Phones shipments in the first quarter of the year than there were BlackBerry shipments for the first time globally. Also Windows Phones seems to have overtaken BlackBerry in web usage as well.