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BlackBerry’s pricing strategy a flop: Analysts

BlackBerry’s pricing strategy a flop: Analysts
Recent press statements about BlackBerry sales highlight how miserably the company has failed in its pricing strategy in India.

The slew of recent press statements about BlackBerry sales have only highlighted how miserably the company has failed in its pricing strategy in India, one of its most important markets, say analysts.

The struggling Canadian smartphone maker has badly slipped up in India as its strategy to price its devices on the premium side backfired and most smartphone users picked up low-cost Android devices instead, they added. From being a leader in the smartphone market at one time, BlackBerry's India market share has been reduced to a dismal 0.2% as of December 2013 compared to 4.3% in December 2012, according to data from research firm IDC.

Analysts feel that the company could have priced its devices much lower in India, a highly price-sensitive and competitive market, or could have come out with a larger portfolio of devices across different price points, after launching its flagship Z10 smartphone in February 2013. However, given the recent statements of the senior management on staying away from low-cost devices, any rebound in India looks a far cry.

"The pricing strategy has gone horribly wrong," Mansi Yadav, an analyst at research firm IDC said, adding that the Rs 43,990-price tag for the Z10 was far higher than customer expectations. BlackBerry was forced to slash Z10's price to Rs 29,990 in September 2013 under a special offer and then again on February 25 this year, Rs 17,990, under a limited period offer.

BlackBerry then had to replenish stocks as customers lapped up the Z10 at the attractive price. And it's not just Z10, last week, the company lowered the price of Z30 by 10% to Rs 34,990 after launching it in October 2013 for Rs 39,990. In January, BlackBerry cut Q10's price to Rs 38,990 and Q5's to Rs 19,990, under limited period offers, in an attempt to reach out to Qwerty keypad enthusiasts.

BlackBerry refuted analysts' views, saying that the pricing of a product depended on multiple factors like its operating system, hardware quality, manufacturing costs, and currency exchange rates, and price reduction of a product is common for smartphones. It said that while the strengthening of the rupee against the US dollar had allowed the company to lower the costs of Z10 to Rs 17,990, it admitted that higher levels of inventory of the model had also played a hand

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