Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) stated that price cuts for its BlackBerry Z10 by carriers and retailers in the United States is quite normal. One of the spokesmen at BlackBerry told The Wall Street Journal, “its part of life cycle management to tier the pricing for current devices to make room for the next ones.”
Analysts doubting the move
However, everything does not seem as usual as the company is claiming. Cutting down the price of old mobile phones is a common practice amongst retailers and network carriers but in case of Z10, the smartphone is just four months old, and the price of the Z10 has been slashed by almost 75 percent.
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Retailers and carriers have cut prices of BlackBerry Z10 very soon, and this is not in the interest of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB), says Nomura Equity Research analyst.
Analysis firm Jeffrey stated that slashing the price at the time when the launch of another device is just around the corner is unusual, and possibilities of excess inventory cannot be ignored.
Jefferies suggest two choices
Jeffrey analysts said that BlackBerry is left with two choices. The first one is to keep on working hard to enhance their ecosystem, making the device better and try to catch up with Android and iPhone. This is a difficult road to walk because resources are less compared to Apple Inc (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG).
The second option is to popularize the secure workspace, which they offer, to let their apps work on Android and iPhone, and focus on the services they provide rather than being a hardware company.
Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) top level it seems, is inclined towards the second option as recently they have talked about it frequently, says a report from AllThingsD. CEO Thorsten Heinz gave hints of the same during the earning calls of the company and then later at the annual meeting.
Heins noted that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) was never only a device company. It also provides global secure data network and services. He added that the management is in no mood to make the company only “Hardware Company” as it would be a short term perspective.
BBRY betting on A10
Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is looking forward to launch a new device, the A10, towards the end of the year. It is unclear what would be the next step of the company after it posted grim results for the first quarter and sold just around 2.7 million BlackBerry devices, but the company should hope that its A10 fares better than Z10 or it will have to keep on toiling for success.