One sure sign that a new product is not living up to its expected results is a falling price. And that is what's happening in the United Kingdom to the new touchscreen Z10 smartphone from BlackBerry (NASDAQ: BBRY). The phone will not go on sale in the U.S. until later this month.
According to The Telegraph, both Vodafone PLC (NASDAQ: VOD) and another U.K. carrier have cut prices on their Z10 contracts in an effort to attract more customers. One retailer, Carphone Warehouse, has dropped its £36 monthly contract price to £29 a month with a free handset. Vodafone has cut its price by the equivalent of £72 over the life of a two-year contract.
The cuts are almost certainly being made by the carriers, not BlackBerry. The effect of the price cut, as The Telegraph points out, is to position the Z10 as a mid-level device, not in the same league as the iPhone from Apple Inc. (NASDAQ: AAPL) or the Galaxy phones from Samsung Electronics. That creates a problem for BlackBerry's margins and could let the air out of rising hopes for the company's recovery.
Shares of BlackBerry are trading down about 0.6% today at $13.17 in a 52-week range of $6.22 to $18.32.
Filed under: 24/7 Wall St. Wire, Consumer Electronics, International Markets, Telecom & Wireless Tagged: AAPL, BBRY