BlackBerry's New Phone Is Its Most Outrageous

BlackBerry has made many product pricing missteps in recent years. The tablet was
priced far too ambitiously. The first two models featuring the new OS10 were both priced above $600, which was a mistake. This summer's value model , Q5, was priced well above $400, which is too much for the mid- range buyers to bear. But the oddest decision BlackBerry has ever made was pricing the new 9720 at $280, where the model is now debuting in America and Europe.
The 9720 is a budget model saddled with an ancient operating system and a display that is only 2.7 inches. This is not necessarily a bad idea – the new Nokia Asha 501 is currently selling at least tolerably well, even though it has a 3 inch display and an even older OS. But the Asha 501 is priced currently below $100. It can actually be bought right now under $80 in some key markets. And even with this level of price aggression, Nokia's Asha unit volumes have missed consensus for two quarters running. That's how tough the budget phone market right now. You need a 3 inch display, a decent camera, new UI software on top of your creaking old OS - and you still have to price these types of models below $100. And you still end up with declining volumes, as devices equipped with newer Android OS continue gaining budget share. Pricing the BlackBerry 9720 at $280 seems like an epic folly by BlackBerry. The price will look even more ludicrous if Apple launches the new value iPhone around $350. The scary thing here is that if the company cannot sell a BlackBerry phone using the old OS under $250 this summer, it can hardly expected to sell an OS10 device under $200 anytime soon. And it's quite possible that the low-end BlackBerries need to move to under $150, not just under $200. The low-end Android competition has reshaped the budget phone market radically over the past two years. It seems that BlackBerry remains entirely incapable of responding to the pace of change.