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Last Ditch Effort To Save The Sinking Ship: BBRY Slashed Priv’s Price

11 Apr

Blackberry Ltd, Blackberry Stock, Blackberry Priv, smartphone industry, android powered smartphone, BBM, BBRY shares,

The Canadian smartphone maker is witnessed a slow year with a decline in its stock price and decline in Priv’s sale; to spice things up the company decided to slash the price of its latest android based smartphone.

Blackberry Ltd has seen a rough start to the current year as the stock of the smartphone maker has declined by as much as 21% as the company is still making efforts with a struggling hardware business. Re/Code has reported that the Canadian smartphone maker has slashed the price of its Priv, android powered smartphone to $649 while initially the phone was being sold at a price of $699.

At the time of Blackberry Priv’s launch, many had though that the price was a bit out of boundary given that it was no longer a leader in the smartphone industry nor had it ever launched a phone that was android based. However, during its initial months we believe the product did fairly well in the market, as it was sold out at most stores plus it was competing at Google’s and Apple’s level. We do believe that even this slashed in the price is not justified by the former smartphone leader; however it does put it in par with other flagship smartphones.

According to the recent earnings report, BBRY managed to sell around 600,000 units in total which is a fewer than expected number however this current price slash seems like the last effort made on the company’s part to save the sinking ship. Initially the chief executive officer John Chen had stated that in case the device fails to do well in the market, the company will exit the smartphone industry and direct its focus towards its security software.

This current situation that can be seen via the latest earnings report suggests that the handset business future and profitability seem rather grim. The CEO again mentioned last week that if the handset business did not generate profit for Blackberry, it would completely shut that division down.

Before 2007, Blackberry was one of the leading companies in the smartphone industry; everyone wanted to get their hands on a Blackberry Bold or Curve and everyone wanted to be on BBM. However, with the advent of Steve Job’s iPhone, BBRY slowly and gradually started to lose its market share. The reason for its failure in the smartphone market was mostly due to its reluctance to keep pace with competition as well as technology. But with the launch Android based Priv, the company proved that it can (after a long period of nine years) keep pace with technology and provide the customers with exactly what they are looking for.

Furthermore, in an interview with Bloomberg, John Chen stated that its latest product’s distribution model needed a revision due to which the there was a delay in the launch of the product. In addition to that he said that the organization will need to sell as many as three million units yearly in order to make the company’s hardware business profitable.

As per the recent rumors, BBRY is planning on launching two new android based smartphone in mid-price range however launch dates for these products have not been announced as yet. Since these will be mid-range priced phone, the company will need to sell extra units to cover its lower average selling price.

 

 

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Posted by on April 11, 2016 in Blackberry, Finance News

 

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