Earlier today we reported that the BlackBerry Z10 had received a substantial price drop of Rs 11,000 and was now available for Rs 30,000. Now, BlackBerry India sent out a press release claiming that the price drop was a “limited period festive offer.” This couldn’t be farther from the truth.
Today’s press release:
In keeping with India’s festive season kicking off, BlackBerry today announced a limited period festive offer. Customers can now purchase BlackBerry Z10 smartphone at just Rs.29990.00. This lucrative scheme on BlackBerry Z10 is in line with BlackBerry’s commitment towards the Indian market and will help the brand to reach out to more number of potential customers.
The press release is nothing but a spin on what is essentially bad news for the company. BlackBerry announced its preliminary quarterly result last week where it admitted that its BB10 smartphones were not selling well and the company would write off up to $960 million in inventory, mostly Z10 units.
Here’s an excerpt from last week’s press release:
For the second quarter, the Company expects to recognize hardware revenue on approximately 3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the quarter will not be recognized until those devices are sold through to end customers. During the second quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company’s inventory in channel.
As a consequence of the more intense competition the Company is experiencing in its hardware business, it expects to report a primarily non-cash, pre-tax charge against inventory and supply commitments in the second quarter of approximately $930 million to $960 million, which is primarily attributable to BlackBerry Z10 devices.
As for the “limited period festive offer” claim, in the global press release BlackBerry mentioned that the Z10 will be re-tiered.
As part of the Company’s focus on enhancing its financial results, and in response to the increasing competition in the smartphone market, BlackBerry also announced plans to transition its future smartphone portfolio from six devices to four. The portfolio will focus on enterprise and prosumer-centric targeted devices, including 2 high-end devices and 2 entry-level devices in all-touch and QWERTY models. With the launch of the BlackBerry Z30 – the next generation high-tier smartphone built on the BlackBerry 10 platform — this week, the Company will re-tier the BlackBerry Z10 smartphone to make it available to a broader, entry-level audience.
In short, the Z10 price cut has nothing to do with it being the festive season and neither is it a limited period offer. In simple terms, it is called stock liquidation. It is not the first time BlackBerry has done it as we have seen it happen with the PlayBook earlier.