BlackBerry drops service fees for consumer push

BlackBerry drops service fees for consumer push
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BlackBerry manufacturer Research in Motion (RIM) is waiving its service fees for its forthcoming BB10 consumer devices as it looks to stimulate demand for its make-or-break handsets.

The fees, which operators said amount to several pounds per handset per month, are charged for specific BlackBerry services that it offers business and consumer customers. It is understood RIM will still charge a service fee for its business devices but operators welcomed the dropping of the fees for consumer handsets.

One operator said: ‘RIM is not as strong a player as it was five years ago. It does make sense that RIM will charge the service fee for its business customers because they are getting a suite of services. With consumers, it’s effectively email and that’s now a product that you can get for free through Google or Apple on rival smartphones.’

Another said the move was one way RIM will try to arrest its declining market share. According to figures from Kantar Worldpanel ComTech, RIM’s UK share fell from 19% to 7.9% in the year to November 2012. The operator said: ‘It looks like RIM wants to make it as easy as possible for people to come back to it and generate support for the handsets.’ It said it would be ‘significantly’ increasing its marketing spend this quarter to launch the BB10 handsets.

The move will have a knock-on effect on RIM’s revenue streams. In its most recent results, for the three months to 1 December, the manufacturer warned the launch would hit sales of existing BlackBerry 7 phones, which will be price promoted. It said the new devices would also affect subscribers and service fees.

RIM is expected to reveal at least two handsets on 30 January, one with a touch-screen interface and the other with the traditional BlackBerry Qwerty keyboard. It is the latter that is exciting retailers and operators more, with one source telling Mobile RIM will face strong competition in the crowded touch-screen handset market. EE is expected to sell a 4G BlackBerry handset.‘There is a lot of expectation for these handsets,’ said one operator. ‘It’s definitely one of the big shouts for the first quarter of 2013.’ The touch-screen device is expected to go on sale first, with the Qwerty device to follow afterwards.

The manufacturer received a pre-Christmas boost from each of the four operators, as well as Phones 4u and Carphone Warehouse, with the businesses confirming they will stock the devices. The next 12 months have been seen as critical for RIM, which once led the smartphone market but has been overtaken by the surge in demand for products by Apple and Samsung.

Author: Graeme Neill

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