Blackberry (NYSE:BB) recently launched Z3, a smartphone specifically targeted at emerging market consumers. In Indonesia the Z3 sold out in the first day of the launch, and the company is set to launch the Z3 in India on June 25th. The encouraging sales in Indonesia are a good sign for Blackberry as the company tries to improve device sales, which have been on a southward spiral for a few years. Z3 may just be the model that will at least stem the slide, if not reverse it.
Priced right for the price-sensitive
Consumer markets such as India and Indonesia are very price-sensitive. The markets are dominated by phones running Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android OS. Local manufacturers such as Micromax and Karbonn have done well in India, though at present, Samsung leads in market share.
A recent Nielsen on Device Meter survey also suggests that Samsung (NASDAQOTH:SSNLF) is the favorite brand in Malaysia, Singapore, Philippines, India and Hong Kong. . One of the reasons behind Samsung's dominance and Micromax's rise is the ability to cater to consumers at varied price points.
Also, in most of these countries, smartphones are not available on contracts and therefore consumers have to pay the full price for the devices. Till now, most of Blackberry OS10 phones were priced in $700-800 range and received lukewarm response from customers.
A case in example is the Z10 which had hardly sold in India when it was launched at about $800. However, it sold out when Blackberry dropped the price to $300.
Z3, at sub-$200, seems to be priced right for these markets.
Growth from growth markets
Adoption of smartphone devices is picking up in emerging markets, particularly in India where Blackberry is targeting price-conscious consumers with the Z3. Gartner reports that India had the highest smartphone sales growth among countries at 166% in Q4 2013. Z3, touted as the Blackberry's first consumer phone running OS10, aims at capitalizing on this phenomenal growth trend in emerging markets to reverse its fortunes in developed markets.
Bang for the Buck
Z3 has very good hardware and software specifications for the price. As compared to its competitors in the same price range -- Google's Moto G and Nokia Lumia 630 -- it has the largest display. The RAM configuration is also superior for the Z3 at 1.5GB as compared to 1GB and 500MB for the Moto G and the Lumia 630, respectively. Z3 also runs on the OS 10.2.1 which means that it will be able to run Android apps as well.
The Z3 product offering is a very exciting prospect for Blackberry in India, and it seems to be just right for its target markets. The specifications at the price are an unbeatable combination and will definitely appeal to the value-conscious emerging market consumers. If Indonesia is any indication, Blackberry seems to be well on its way to gaining traction in another key market.
Saurav Chakraborty has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.