BB Price May Fall Furture


2 May 2011
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MUMBAI: BlackBerry-maker Research in Motion (RIM), which recently cut prices of some of its smartphone devices, expects the move to boost its sales by about 25-30% in a competitive Indian handset market. The Waterloo, Canada-based mobile handset maker, which is struggling to compete internationally with Apple's iPhone and the Android-based smartphones, considers India as one of focus markets where lowering prices will help it reach more customers.

Sunil Dutt, MD, RIM India, who took over the company just a few months back, said in an exclusive chat with that more price cuts could not be ruled out as the brand gets the benefit of economies of scale through increased sales. However, leaders in the smartphone market - Samsung and Nokia - said they are not looking to slash prices and will instead focus on broadening their product portfolios.

"The objective is to reach out to more consumers and, therefore, make our devices affordable for both the consumer segment as well as for our enterprise customers," Dutt said.

RIM slashed prices of select models by up to 26% indicating a change in its India strategy. Analysts tracking the sector said that the average price of a BlackBerry smartphone stood at Rs 21,000, which is extremely steep compared to other brands in the market.

"The price cuts will give them volumes but it is unlikely to have any impact on market shares. There is room to further lower prices as well as broaden its portfolio specifically in the Rs 10,000-15,000 range and also in the sub-Rs 10,000 segment, which boasts of multiple domestic vendors such as Micromax, Karbonn and Lava, which have already launched low-cost smartphones in a bid to drive future demand as they attempt to move up the value chain from low-cost feature phones," said G Rajeev, senior market analyst, mobile devices &tablets, IDC India.

Samsung, the leader in the smartphone segment with 17 models in the market, has six devices in the sub-Rs 10,000, seven in the Rs 10,000-20,000 bracket with only four models above Rs 20,000. RIM's BlackBerry, on the other hand, has only one model - the hugely successful BlackBerry Curve model - in the sub-Rs 10,000 range.

According to the Framingham, Massachusetts-based market researcher IDC, the share for RIM in the Indian smartphone market stood at around of 10% in fourth quarter of 2011. Samsung led with 35% share while Finnish-handset brand Nokia had a market share of 31% for the October to December period last year. The smartphone market in India grew by 99% year-on-year in shipment terms to reach 3.39 million units for the fourth quarter. It is projected to grow by 54% during the period of 2012-2016.

RIM reported a fourth quarter loss of $125 million as it shipped 11.1 million units, down by 21% from the previous quarter. Dutt said the global worries did not impact the India operations, one of the best for the Canadian parent. "We are increasing our investment on the brand, distribution, products and on people here," Dutt said.

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