Struggling phone makers BlackBerry and Nokia go for the low end

I've been in Barcelona for just over 24 hours and I've already spotted a trend as two manufacturers that have struggled to gain marketshare -- Nokia and Blackberry -- announced strategies to aim for the lower end of the market.

Last night, I spoke to a spokesperson for Blackberry who didn't shy away from his company's precarious market position. Last year at this time, Blackberry was showing off the Z10, a phone I quite liked when I saw it, but by now, we know it did little to staunch the Blackberry's market share bleeding. The spokesperson acknowledged as much and pointed to the change in leadership as proof the company understood this and was taking it seriously.

Then he told me about a five-year deal between Blackberry and Foxconn, the Chinese manufacturing conglomerate that makes iPhones and iPads among other devices, to build a new Blackberry phone that would be aimed at the lower end buyers in emerging markets.  USA Today reports that investors liked the deal so much, their stock price surged more than 15 percent. As for me, I'm wondering if a five-year deal is a tad optimstic. I'm not convinced the company will survive that long.

Then there's Nokia, which announced the new Nokia X line this morning. These are phones that run a version of Android designed not to link to the Google ecosystem, but to Microsoft's. It will have its own store and developers will have to port their apps to Nokia's unique Android flavor. As my colleague veteran technology reporter Rob Pegoraro put it, that strategy might work for Amazon, but he was dubious it would work for Nokia.

Meanwhile, there was the pricing the strategy starting at just 89 Euro for the low end Nokia X, 99 euro for the Nokia XL and and 109 Euro for the higher end Nokia X+. Nokia announced it will release it widely, but would start in emerging markets, which I'm presuming equals BRIC countries, Brazil, Russia, India. and China.

Nokia CEO Stephen Elop didn't hide his company's plan, which is to capture the next billion cell phone users and get them to use Microsoft services. As they grew more sophisticated, the hope is that these devices would act as a feeder system to the higher end Nokia Lumia line running the Microsoft mobile operating system.

Both companies are hoping that by aiming for the less profitable low end, they can increase marketshare in the same way Google has captured huge swaths of the market with low-end Android devices. Blackberry and Nokia are banking on this same idea, but at this point in the evolution of the market it's going to be difficult to pull off, even in markets like India and China, where generic custom versions of Android are most common.

But it's certainly interesting that both companies, which have struggled with declining market share over the last couple years, said that they are looking for a way to increase their numbers just to remain relevant.

From CIO: 8 Free Online Courses to Grow Your Tech Skills
View Comments
Join the discussion
Be the first to comment on this article. Our Commenting Policies