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commentary The BlackBerry Bold may be out of the smartphone game before it even gets into it.
T-Mobile
T-Mobile USA said today that it will sell RIM’s latest flagship phone, the BlackBerry Bold 9900, for $299.99–after a $50 mail-in rebate. That follows the Verizon Wireless and Sprint Nextel variant of the smartphone, the Bold 9930, which will retail for $249.99 at both carriers.
But when the bar for a vast majority of smartphones–even high-end ones such as Apple’s iPhone–is set at $200, and you go over, that’s a problem. For RIM, the premium price is going to be a critical problem as the company attempts to claw its way back to the top of the smartphone hill.
“I would describe that charitably as insane,” said Avi Greengart, who covers consumer electronic products for Current Analysis.
Granted, there are a lot of factors that go into deciding the price of a phone. The carriers may not deem the two Bolds worthy of a larger subsidy, and would rather take the risk on selling the pricier devices. Or RIM may be selling a more expensive product to the carrier. Generally, carriers will set the ultimate price, but there are a lot of unknown variables to consider.
RIM declined to comment for this story. Sprint wasn’t available to comment on the pricing.
Verizon Wireless said it considers the Bold to be a premium device.
“It’s a competitive business, and we price our products appropriately,” said Verizon representative Brenda Raney.
T-Mobile, meanwhile, said the Bold offers customers “great value” when factoring in its lower-priced smartphone plans, while Sprint said its pricing was based on several factors, including the cost to bring it to market. It likewise touted the value of its plans.
Despite who sets the price, at $250 to $300, RIM risks the perception that it believes the Bold is the premier smartphone in the market. And while it’s perfectly fine for a company to believe in the strength of its products, that belief doesn’t jibe with the market perception of these devices. At fault or not, the pricing speaks to the growing view that the company’s management may not be in touch with consumers’ tastes anymore.
The pricing isn’t as dramatic in other markets. Vodafone in the U.K. is giving the Bold away with a two-year contract, while Telus in Canada is selling the phone for $149.99, while rival Bell Canada is selling it for $169.95. Both carriers, however, require a longer three-year contract.
The carriers may be banking on the prospect that the BlackBerry faithful and individuals tied to a BlackBerry for work will make the leap regardless of the price tag. The corporate crowd is typically more affluent than the average consumer.
But for the consumer, there are too many other options. At T-Mobile, the HTC Sensation and MyTouch 4G Slide, which garnered rave reviews, both retail for $199.99. At Sprint, the Motorola Photon 4G and the HTC Evo 3D, considered to be Sprint’s two best smartphones, also retail for $199.99.
Verizon Wireless, however, does offer more expensive phones. A version of the iPhone 4 with double the memory of the standard version retails for $299.99. The Droid Charge from Samsung Electronics and the HTC Thunderbolt also carry a premium, but the extra cost is largely attributed to its 4G LTE capabilities.
The Bold is no slouch of a device. While it still lacks a strong library of applications and offers less access to content, RIM worked hard to improve its latest flagship phone. The device has won praise for its revamped software and solid keyboard, as well as the continued strength of its messaging system.
Still, getting the wrong price out of the gate can be disastrous for a product. Motorola Mobility made that mistake by pricing its Xoom tablet at $799.99 through Verizon Wireless, and offering a $599.99 WiFi-only version that was still pricier than the iPad 2. Sales were mixed until the price cut, according to Chief Executive Sanjay Jha.
Verizon currently sells the Xoom for $499.99 with a two-year contract.
Likewise, Motorola’s decision to sell a bundle including its Atrix smartphone and a laptop dock for $599 led to a lukewarm response by AT&T customers, necessitating a price cut.
RIM could also be forced to quickly cut the price of its Bold. But that comes with its own hazards. Hewlett-Packard quickly slashed the price of its TouchPad by $100, but that hasn’t spurred sales. Instead, consumers who were interested are pausing to see if further discounts will come, leading to a high amount of unsold inventory at Best Buy, AllThingsD reported yesterday.
RIM wants to have a solid presence in both the business and consumer world. It may have more success with some of its other devices, including the BlackBerry Torch, which will retail for a smartly priced $49.99 at AT&T.
But those aspiring to get a Bold may end up doing a double take.
“For people on the fence about staying on with BlackBerry,” Greengart said, “there’s no way they’re staying.”
Updated at 1:56 p.m. PT: with a comment from Sprint.
