irst, no matter how cheap BlackBerry makes its devices, there will always be a no-name vendor willing to go even cheaper. For example, consider the Xiaomi Hongmi, an Android smartphone that released in China this year that features a quad-core 1.5GHz processor, a 4.7-inch display with a pixel density of 312 pixels-per-inch, an 8-megapixel rear-facing camera and a 2,000 mAh battery… and that costs only $130 off-contract. You can be certain that Xiaomi is barely making any profit on every device it sells and is only able to stay in business by pumping out tons of these phones and aggressively selling them to consumers in emerging markets. And there are many, many more Xiaomis in emerging markets than BlackBerry could ever hope to keep up with.
Earlier today we posted a smartly argued piece of analysis from Wedge Partners analyst Brian Blair, who made a compelling case that BlackBerry should get out of the high-end smartphone market completely and move aggressively to target emerging markets with bargain-bin smartphones. While Blair made a lot of terrific points in his analysis, I found myself at the end unpersuaded that his advice to BlackBerry is the best course of action for the company to take.
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