Heins has been a genius to date. He did not give much detail on service fees except that it would change dramatically into a tier system. Heins would not make such a move unless if he had received assurances that new model would work and generate more service revenue income with lesser cost attached to rendering this service.
This gives RIMM the opportunity to charge more than $ 4 per month per phone.
Tier model could look as follows for a corporation:
a) Gold Plan, top notch security, $ 8 per phone per month
b) Silver Plan, medium security, 6 per phone per month
c) Bronze Plan, low level security, 4 per phone per month
d) Copper Plan, no security much like Apple, 0 per phone per month
Overall service revenue would be greater bang for your buck. Instead of being on the hook with 80 million phones to service, the true number may be only 45 million phones, generating higher service revenue with lower overall cost.
This also gives carriers muscle to push product out as they will agree to marketing.
BB10 will be a hit selling 50 million phones in 2013 and, a similar amount in 2014.
I know it is scary but HEINS has been pulling all the right moves, gotta trust that he knows what he is doing.
You are right. This business model will increase the subs and this is a fair business model.
If you do not need the extra service, you don't pay for it. That's how one should provide services.
The CEO said "Our vision is to position BlackBerry as the clear leader in the enterprise mobility market. While the mix and level of service fees revenue will change going forward and will be under pressure over the next year during this transition, but we are targeting to grow service revenue in smartphones, tablets and embedded application to a new offering with new partners and across platforms other than BlackBerry 10. We're making these changes to meet the competitive dynamics of the marketplace but more importantly, to allow us to pursue the broad opportunities in mobile computing that BlackBerry 10 and our infrastructure enables us to do".
This is a great model to draw subs that need lower level of service. When I go to Penzoil to change oil, I don't pick the "Gold" service level ($60), which include services I do not need. I pick the $30 service that satisfies my needs.
It will take a few days for people to digest this and we will be back on track.
You nailed it. "One fee fits all" is yesterdays business model. People are too sophisticated and picky. You need to custom make the business model as time go by. Many companies have gone bankrupt because of the stubborn one fee fits all/one size fits all policies. The reduced fee level will draw a lot of new smart phone users to BB.
I operate a business in which we offer tier service plan. We had tried a fixed price for each client and it did not work well. We were locked into fixed revenues while cost remained the same. At first we had concerns about offering tier service plan. It is now 3 years since we made the switch. Our sales have been soaring. It is so much easier as we target price to client needs. Each client is different. It also opened the door to new revenue as we were no longer locked into that one price. So I can tell you that it works. Look at the Canadian banking system which is flourishing in client fees as they offer tier services, a little of this, of that and of all sorts of things. Look at Videotron or cable deals, TV, phone, internet, cell, a little of all and bill goes higher. People love simplicity and love to feel that their needs have been met.