Less than four months ago, the folks at BlackBerry (NYSE:BB) were nervously anticipating the U.S. launch of their first BB10-enabled smartphone in the touchscreen-only BlackBerry Z10. Then, late last month, the company also launched its second BB10-enabled device in the U.S. with the physical keyboard-touting BlackBerry Q10.
With both devices originally priced at $199 with a two-year contract at Verizon or AT&T -- on par with the price of Apple's (NASDAQ:AAPL) iPhone 5 smartphones -- BlackBerry bulls had hoped the new devices would serve as a solid starting point to help their stock regain at least some of its former glory in its well-publicized fight back to sustained profitability.
Unfortunately, shares of BlackBerry suffered a one-day drop of more than 27% a few weeks ago, after the company posted dismal quarterly earnings, in which they announced that just 2.7 million of the 6.8 million total smartphone units shipped last quarter featured its BB10 operating system.
And though BlackBerry's CEO begged for patience at last week's shareholder meeting, effectively telling analysts at the time that none of the metrics they're using to gauge BlackBerry's success actually show how it could create shareholder value over the long term, The Wall Street Journal this week astutely noticed that prices for the Z10 are already falling.
Sure enough, if you take a peek at your local Verizon or AT&T store, you'll find the Z10's contract price has just been cut in half to $99.
What's more, consumers who take the time to look around will find that Amazon.com is now offering the Z10 with a two-year AT&T contract for just a penny, and Best Buy is now willing to give it to you for free.
And while the Q10 still goes for $199 when purchased directly through Verizon and AT&T, you can also pick it up from Amazon.com with a Verizon contract for a mere $99.
For reference, Apple's iPhone 5, which was launched in September, 2012, is still $199 at all major carriers, and the older iPhone 4S, launched in October, 2011, still sells for $99. Then again, Apple's even older iPhone 4, like the Z10, can be had for free with a contract through Verizon or AT&T, but that's no surprise since the iPhone 4 was released more than three years ago -- and remember, as I wrote back in April, around half of the 4 million iPhones Verizon sold last quarter were either Apple's iPhone 4 or 4S models.
Call me crazy, but that certainly doesn't seem to bode well for those hoping BlackBerry's Z10 and Q10 sales would pick up going forward, especially considering Apple may be gearing up to roll out its next line of iDevices this fall, the plans for which could very well include a cheaper version of the iPhone to grab market share outside Apple's existing wheelhouse in higher-end devices.
Of course, The Wall Street Journal also noted that a BlackBerry spokesman already issued a statement regarding the new prices, saying that "now is the right time to adjust the price" of the Z10 as BlackBerry readies its next round of BB10 devices.
In addition, the statement elaborated: "It's part of life cycle management to tier the pricing for current devices to make room for the next ones. This is just one element of our marketing strategy that will ensure we remain aggressive in a very competitive market landscape."
But however they try to spin it, I'm sure I'm not alone in remaining unconvinced that this is nothing more than a reaction to a continuation of worsening sales results for BlackBerry.
Sure, BlackBerry CEO Thorsten Heins rightly pointed out last week that BlackBerry is more than just a device company, and a there's a chance the BlackBerry Messenger platform could provide some value even as the company's smartphone sales wane. However, as fellow Fool Evan Niu noted yesterday, the success of BBM is far from assured, as it has plenty of competition of its own.
In the end, while BlackBerry's $3.1 billion cash balance offers a compelling reason to buy given the company's $4.8 market capitalization, all that dough won't mean much over the long run if BlackBerry can't stem its market-share losses soon.