BlackBerry might further cut handset prices

The smartphone maker suffered huge loss of $4.4 billion in its third quarter ended Nov 30

The price of the latest BlackBerry handsets are expected to fall further, as the Canadian smartphone maker plans more sales incentives to distributors and operators for pushing the sales of its BB10 devices.

To improve sales and stimulate global demand for BlackBerry 10, the company executed marketing campaigns and reduced the price on new shipments during the second and third quarters of financial year 2014, the company said in a filing to the US markets regulator.

“The company plans to implement further incentives with its carrier and distributor partners to increase sell-through, which could be applicable to all BlackBerry 10 devices shipped in the second and third quarters of fiscal 2014,” the company said.

The smartphone maker suffered loss of $4.4 billion in its third quarter ended November, mainly due to unsold handsets. “The company can no longer reasonably estimate the amount of the potential sales incentives that might be offered on certain devices, resulting in revenues for BlackBerry 10 and BlackBerry 7 devices in certain regions,” the filing said.

BlackBerry lowered price of its high-priced handset in India, BlackBerry Q10, to about Rs 40,000 from Rs 45,000. The device is available for Rs 36,000 online.

In February, the company launched its full-touch screen smartphone BlackBerry Z10 for about Rs 43,500 which is now available in the Indian market at about 40 per cent less price of Rs 25,000. BlackBerry also said the sell-through levels for BlackBerry 10 devices decreased during the second quarter of financial year 2014, causing the number of BlackBerry 10 devices in the channel to increase above the company's expectations.

The smartphone maker has to cancel plans to launch two devices to mitigate inventory risk, it said.

BlackBerry recorded a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $1.6 billion in the third quarter of financial year 2014 and this charge was primarily attributable to its BlackBerry 10 devices. During the third quarter, the company sold approximately 4.3 million smartphones to end customers. Of the total smartphones sold, approximately 3.2 million were BlackBerry 7 devices which include models like BlackBerry Curve, Bold, Torch, etc.