Courting New Pearl Users
While Research in Motion's strong fiscal third-quarter performance and stock option review are in the spotlight, an interesting theme from yesterday's conference call with analysts was the idea carrers will unveil pay-as-you-go or lower price, consumer-friendly packages. It is based on the idea you can increase the number of high-margin Blackberry users by making price less of an issue. T-Mobile, for example, is offering a $19.99 all-you-can-eat plan as part of its Pearl marketing efforts. Truth be told, one of the Blackberry's dirty, little secrets - and perhaps a key part of its success - is few people really pay to use them. Instead, their companies pay the Blackberry bills so most people don't pay much attention to how much it costs. Jim Balsillie, RIM's co-CEO, said Blackberry users are five to six times more profitable than regular cell phone users, which is why carriers probably love the Blackberry so much. Given the Pearl is more of a pro-sumer device, price will play a role in its success after the initial euphoria is over. Let's see if Canadian carriers, who have adopted pricing discipline as a corporate mantra, will buy into a Blackberry pricing approach.
