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BlackBerry smartphone prices expected to reduce with planned sales incentives

BlackBerry smartphone prices expected to reduce with planned sales incentives

By Press Trust of India | Updated: 23 December 2013 12:36 IST

The prices 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.

In order to improve sales and stimulate global demand for BlackBerry 10 devices, the company executed marketing campaigns and reduced the price on new shipments of BlackBerry 10 smartphones during the second and third quarters of fiscal 2014, the company said in an SEC filing.

"The company plans to implement further sales 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 in the filing.

The smartphone maker suffered a huge loss of $4.4 billion in its third quarter ended November 30, mainly due to unsold handsets.

(Also see: BlackBerry reports massive $4.4 billion Q3 loss, announces Foxconn partnership)

"The company can no longer reasonably estimate the amount of the potential sales incentives that may be offered on certain BlackBerry devices in future periods, resulting in revenues for BlackBerry 10 devices, and BlackBerry 7 devices in certain regions," the filing said.

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

(Also see: BlackBerry Q10 price slashed in India to Rs. 38,990 in limited period offer)

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 Rs. 25,000, which is roughly 40 percent less than launch.

BlackBerry also said the 'sell-through levels' for BlackBerry 10 devices decreased during the second quarter of fiscal 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 fiscal 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.

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