BlackBerry Z10: Prices pruned despite eager iPunter interest

How well is the Z10 from BlackBerry - née RIM - faring? Reports on the handset’s retail success, on which BlackBerry’s recovery as a business is riding, are mixed.

Late last week, Carphone Warehouse and Vodafone separately pruned the price of the handset, not a good sign for a premium device that has been on sale for less than a month.

CW is offering the handset with a Three £29-a-month, two-year contract, down from the £36 per month package the other networks are currently attaching to the Z10. The higher-priced tariff bundles the phone for free whereas the CW Three deal requires a £29 up-front payment for the hardware. Even so, calculates James Faucette of Pacific Crest, a US-based broker, this is effectively a price reduction of £160.

The Vodafone cut sees the Z10 being offered for free on a reduced, £33-a-month web-only tariff. Again, the contract length is two years, an amounts to an effective £72 off the SIM-free price.

Faucette wonders about the impact of such effective cuts on the Z10’s revenue generating potential for BlackBerry, noting that the price cuts could indicate a shift down-market for the Z10, from a high-end product to a mid-range offering. This will, in turn, reduce BlackBerry’s margins and thus the profitability on which the company’s recovery is predicated.

Of course, CW and Vodafone could simply be taking advantage of common tariff price fluctuations to make the Z10 more attractive, rather than responding to reduction in the wholesale price BlackBerry sells the Z10 for. It’s perhaps too early to see this as the start of a trend, or a sign that punters aren’t biting.

Separately, website BGR says half of all of Z10 sales in Canada and a third of those in the UK have been made to punters who were previously using iPhones or Android handsets. The claim comes from “several high-level BlackBerry executives”, speaking not to BGR but in an internal report on the phone’s progress subsequently leaked to the site.

This is not necessarily the “coup” BGR says it is, assuming for a second that the document is genuine: how important the migration will be depends on the number of handsets BlackBerry has actually shifted in those countries - assuming, of course, that the alleged BlackBerry executives’ figures are accurate to begin with.

Faucette claimed in the recent past: “We continue to believe the Z10 launch involves relatively small shipment volumes and only moderate sell-through so far in markets which have historically been some of BlackBerry’s strongest.” Faucette is something of a Z10 sceptic, it has to be said, but other market watchers have expressed the same thought.

At the end of last week, BlackBerry posted its first public software update for the Z10. Improvements include correct Gmail calendar support, better call-logging and conversation-handling in the BlackBerry hub, better support for importing contacts from online sources, optimisations to allow the built-in camera to take better snaps in low light, improved video playback in the web browser, and better battery life. ®