Why There Won’t Be a Fire Sale on Those Unsold BlackBerry 10 Phones (At Least Not in the U.S.)
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BlackBerry made a lot more of its first BlackBerry 10 phones than the market wanted, but CEO John Chen said he is trying to avoid the approach the company took when it unloaded a bunch of PlayBook tablets that were gobbled up by gadget bargain hunters.
“We don’t want a fire sale for something where we cannot mind that base,” Chen said, saying that if the company does cut prices, it should be in markets where it would really benefit from having more BlackBerrys out there.
“I think in the United States we have to think about it carefully,” Chen said in an interview at CES last week. He noted that outside of the U.S., particularly in emerging markets, buyers are very price-conscious, and reducing the cost could give BlackBerry a bigger presence in regions where it has historically done well.
“Outside the United States, it is very elastic as to the price,” Chen said. “If you look at India, Indonesia, Brazil, we are still being viewed as the favorite. Those [are where] we would like to get a bigger piece of the market. Reducing the price could help.”
BlackBerry took a nearly $1 billion inventory charge in the September quarter for unsold products and has continued to struggle to sell handsets running the newest version of its operating system.
So far, India is the only place where BlackBerry has made a substantial cut, and only on its lowest-end BB10 model, the Q5.
Chen said the company wants to get more BB10 devices in customers’ hands, but he also wants to make sure its devices are reaching people he can turn into longer-term customers.