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Cheaper Blackberry Devices... Will People Care?

|Includes:BlackBerry Ltd. (BBRY)

I think Blackberry will be an interesting company to watch. While they did bring in a new CEO and they are going to get lower cost devices made, the issue at hand with Blackberry is still the weakness in the ecosystem.

With Android and iOS, the ecosystem is established. The App Store for both Android and iOS are developed and contain an abundant amount of apps. There are utility tools, the various social media apps (Snapchat, Vine, etc.), games, etc.

One of the reasons that the ecosystem is so important is that it is due to the the people under 30 years of age. This age group (middle school, high school, and college students) are the ones that creates a HUGE stir in what is considered a "popular" must-have app. Snapchat on my own campus absolutely blew up. It went from barely anyone having it to pretty much everyone on my contacts list having it within a week.

This is one of the reasons why Windows Phone 8 has overtaken Blackberry in terms of market share. Microsoft pushed extremely hard to get developers to develop apps for WP8. They pushed extremely hard to get the popular apps like Vine and so forth. Upon seeing that the same apps are available on another operating system, a person is more likely to switch.

With that established, let's discuss the impact that cheaper Blackberry devices will have. Before we can really take a look into everything, it is necessary to understand the different ways to obtain a NEW phone (excluding winning a contest and things of that nature).

  1. Purchase a subsizided phone from the Carrier (2 year upgrade plan) - Mainly in North America
  2. Purchase the phone outright - More oversea than North America.

Cheaper devices will definitely help drive people to potentially switch over. For instance, if I am in the market for a new phone and the Blackberry has all the apps that I use on my iPhone (it doesn't but we're using a hypothetical scenario), then I may consider the blackberry if it was significantly cheaper.

If the Blackberry did not have all the apps that I use, there would be little chance of me ever switching over. Now this case might be different outside North America where the majority of people use the 2-year upgrade plans to get subsidized phones from the carriers. As a result the lack of apps may at some point be something that can be tolerated if the price difference between a device and Blackberry (not the subsidized price) was significant enough.

However, even in the case of the difference of the un-subsidized prices being significant, Android has a pretty good grasp on the lower price devices along with the Nokia Lumia 521. For instance, the Motorola Moto G is $179 off contract and has the latest Android OS. The Nokia Lumia 521 is under $100 off contract. For Blackberry to compete against this, they not only need to market a cheap device but they also need to have the ecosystem to compete against Android and even WP8.

Developers of apps are generally in the business of making money. They chose a specific platform due to the user base. Given that, why develop for Blackberry when there are three other choices that have a much higher user base? They attempted to achieve this through the ability to run Android applications on Blackberry OS, however, due to it not having the Google Play store integrated, it just simply is not as appealing.

Blackberry will really need to do some work to get more applications and establish a ecosystem if they want to become competitive against the other three.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: I wrote this article and the viewpoint expressed in this article is my own personal opinions that was formed based on observations, forums, and other articles. I am not receiving compensation for writing this article. I have no business relationship with any company mentioned in this article.

Stocks: BBRY