QWERTY fans rejoice! The highly anticipated, QWERTY-based Research In Motion Ltd (NASDAQ:BBRY) Q10 is expected to reach the U.S. by the end of the month.
Just be prepared to pay up for the privilege of owning a modern-day QWERTY smartphone.
Research In Motion has confirmed that the Q10 will run users $249 on a two-year contract in the U.S. Clearly, Research In Motion Ltd (NASDAQ:BBRY) believes it can get away with charging a 25% premium over the Apple Inc. (NASDAQ:AAPL) iPhone 5, the Samsung Galaxy S4, and other flagship Google Inc (NASDAQ:GOOG) Android devices since the Q10 takes aim at deep-pocketed business customers, which can likely spare the expense.
Quite frankly, it’s a risky move, considering Research In Motion Ltd (NASDAQ:BBRY) lacks pricing power and market share. Between Apple Inc. (NASDAQ:AAPL) and Android controlling over 90% of the smartphone market, there isn’t a whole lot of mindshare left for Research In Motion. Not to mention Apple Inc. (NASDAQ:AAPL) experienced a 77% activation rate among enterprises in the first quarter, an area where Research In Motion remains highly committed. So unless you’re an enterprise customer with specific needs or you’re a die-hard loyalist, there’s isn’t any economic incentive to “trade up” to the Q10.
76 million strong
Naturally, Research In Motion Ltd (NASDAQ:BBRY)’s most desirable customers are the ones it already has, which as of last quarter stood at 76 million subscribers worldwide. Although this pales in comparison to Android’s 750 million and Apple Inc. (NASDAQ:AAPL)’s 500 million devices sold, it gives Research In Motion a solid foundation of loyalists who are the most likely to upgrade to the BB10 ecosystem. The unknown is the pace at which these loyalists will upgrade.
This hasn’t stopped Research In Motion Ltd (NASDAQ:BBRY) CEO Thorsten Heins from setting lofty expectations for the device. Although he wasn’t clear as far as timing goes, he expects Q10 unit volume to be in the “several tens of millions” range, which to me sounds like a gross exaggeration.
3 touch, 1 QWERTY
During an interview conducted by Bloomberg in December, Heins told investors that he expects touch device sales to outpace QWERTY devices by 3-to-1. In other words, the CEO of all things QWERTY doesn’t believe that the addressable market for QWERTY devices will be nearly as robust as touch devices.
Perhaps when Heins was referring to “several tens of millions” Q10 devices, he meant over the life of the device. Sill, this figure would imply (based on the 3-to-1 ratio) that “several 30s of millions” of touch devices sold, which seems a bit unrealistic.
By the end of the year, Research In Motion Ltd (NASDAQ:BBRY) expects to have six BB10 devices, covering a range of price points, equally split between QWERTY and touch-only designs. Given the fact that future products are coming, I don’t believe Research In Motion has necessarily made a mistake with overpricing the Q10. The company is likely testing the waters with deeper-pocketed clients. If it can sell potential users on the idea that they’ll be more productive with a physical keyboard, perhaps Research In Motion Ltd is coming from a position of strength.
The article Has BlackBerry Made a Big Mistake? originally appeared on Fool.com is written by Steve Heller.
Fool contributor Steve Heller owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.
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