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Blackberry is in the bargain bin.
Retailers are turning to steep discounts on the newest Blackberry Z10 smartphone in an effort to move millions stockpiled on store shelves.
Analysts said it’s no surprise that the struggling Toronto-based company — whose turnaround hopes are riding on its new BlackBerry 10 line — is keeping up appearances by shipping a large quantity of the phone this quarter.
But it’s becoming apparent that the sticker price needs to come down to capture consumers’ attention and compete with the likes of Apple and Samsung.
“To price it on par with an iPhone or the Galaxy S IV and ask consumers to take a chance on a new operating system is a value proposition that seemed off,” said BGC Partners analyst Colin Gillis.
A number of retailers — some of whom said they were having trouble moving their Z10s — have begun discounting from the initial $200 price with a two-year contract.
A Verizon store in Bayside is selling the Z10 for $100 — or half price — with a two-year contract.
And it wasn’t the only seller cutting prices.
Amazon was offering the same cut-rate deal for the phone.
A manager at the Bayside store said the Z10 was not selling well. He added that a number of potential customers were more interested in the BlackBerry Q10, which boasts a physical keyboard and doesn’t hit stores for several more weeks.
Many hardcore BlackBerry users, of whom there are 76 million worldwide, prefer the traditional keyboard to touchscreen-only phones, including the Z10, analysts said.
“We are seeing strong momentum behind BlackBerry 10 from carriers, customers and partners around the world and the BlackBerry Q10 will accelerate this trend,” the company said in response.
Blackberry is sensitive because of several reports claiming that customers are returning the phone in droves.
While critics have called the reports baseless, the negative chatter has weighed on the company’s shares this week.
A Detwiler Fenton analyst wrote a report on an unusual phenomenon, saying that some stores reported more returns of Z10 phones than sales.
BlackBerry called it “gross misreading of the data or a willful manipulation” and asked regulators in the US and Canada to investigate. The company said return rates for the Z10 are in line with its forecasts and industry norms.