November 22, 2015
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Despite being two diligently different companies, both HTC and BlackBerry share some surprising similarities: (1) both are established players in the mobile game, (2) both have found their fortunes are no longer the same, and (3) both have released new flagship hardware this month. In the case of HTC, the contentious One A9 is being offered, and in the case of BlackBerry, we have the Priv, nee Venice.

To be sure, both devices are solid pieces of hardware, with the Priv occupying the high-end spec segment and the A9 going for more middle-ground. The problem however, is largely the pricing of each, a situation compounded by the fact that neither company can seemingly afford to alienate any potential customers.

The BlackBerry Priv

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Despite all the rumors and leaks for the “Venice“, one thing very few people actually mused on was the cost of such a smartphone. It became clear the device would be expensive based on the curved 5.4-inch QHD AMOLED display and high spec internals including a Snapdragon 808, 3GB of RAM, an 18-megapixel rear camera, a physical keyboard slider, a 3,410mAh battery, and all of BlackBerry’s home-grown security software.

Still, when the pricing was finally announced, $700 seemed slightly high for a device like this: BlackBerry is not the most common answer when one asks for “some popular Android OEMs” given that it literally wasn’t one period until just now. Likewise, some may have lingering fears that the company might be nearing the end of its hardware plans and thus the Priv is an extra risky proposition, a bit ironic given that BlackBerry itself is trying to sell this device in part by the promise of better security for Android.

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The fact that Marshmallow (Android 6.0) won’t even hit the device until next year is already a minor irk for some, and the device doesn’t have a fingerprint sensor despite its release in a post-Nexus Imprint world. If the asking price was $500 at most, many customers might not even hesitate, but at $700 it is more directly competing with the Galaxy Note 5 and Galaxy S6 Edge+, or even LG’s new V10.

The HTC One A9

To HTC’s credit – or detriment – the company’s American pricing of the One A9 was seemingly a fair deal: $400. The trouble was, shortly after its announcement, the “limited time” initial cost was discovered to be far more ephemeral than anyone had expected. Specifically, the promotion ended on November 7th. From that day forward, the device would be sold at its real retail value: $500.

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The specs are decidedly mid-range, though with a twist of premium thrown in. Highlights include a 5-inch Full HD AMOLED display, an Octa-Core Qualcomm Snapdragon 617 SoC, 2/3GB of RAM, a 13-megapixel rear camera, Quick Charging, and the first non-Google deice to ship with Android 6.0 Marshmallow with HTC itself promising majorly expedited updates.

The Case Against

That HTC is charging $500 for the One A9 is a questionably decision at best. The device, at that price point, is thereby more expensive than the OnePlus Two, the Axon Phone, the Motorola Moto X Pure Edition, and – believe it or not – even an unlocked Galaxy S6 depending on where it’s purchased from. This would be all well and good, were it not for the fact that the A9 is a mid-range phone with a small screen. All others in the list have significantly higher specs.

HTC is not exactly in a position of power these days. After making some solid recovery last year, the lackluster sales of this year’s One M9 hurt finances. Currently, the Taiwanese OEM has not only been delisted from the main Taiwan stock inded, but has also decided to forgo offering any guidance estimates for the upcoming 4th Quarter earnings.

The A9 has already been accused of being an iPhone clone, even though the company insists Apple is the copy-cat. This could appeal to Android fans who secretly wish they had an iPhone (or at least the design of one), however the pricing is a major problem.

The Verge Apple HTC A9

Some have been very vocal of their feelings about HTC’s design language.

The Verge

With BlackBerry, it’s simply an issue of the company’s image. Many young Android users have never even used an OG BlackBerry and have no reverence to the company whatsoever. Others have long since made the jump, and yet even another group of Android fans are literally waiting for the OEM to declare bankruptcy (something that some “h8rs” have been saying about HTC as well). BlackBerry is arguably too little too late, and the fact that they are charging such a high price for the phone when it needs as many customers as possible to buy it, seems like a poor pricing decision.

Why it makes cents (The Case For)

In order to understand why this pair of products cost more than you might expect, let us consider both the pricing, and the production itself.

Cost

As far as the actual cost itself goes, neither of these devices are actually that expensive. Considering that the Galaxy Note 5 launched at around $850, the $700 BlackBerry is asking for the Priv isn’t actually that outlandish, especially given its curved QHD OLED display. Likewise the software itself is far more geared towards security-oriented consumers and, perhaps even more so, corporate customers. BlackBerry has been immensely successful in the enterprise realm, and there is no reason why the Priv can’t be viewed as intended for such a market as well.

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With HTC, the One A9 is made of metal and thus is also a far more costly affair than a simple plastic piece. Likewise, the Taiwanese OEM has included 3GB of RAM in many variants, as well as a newer Snapdragon 600-series SoC. Beyond that, HTC products making use of the “One” moniker are rarely cheap, and this product in particular is somewhat more than a “One M9 Mini” might otherwise be considered given the new design and such.

The whole reason they seem “expensive” is largely due to various OEMs – many in China – bringing down the average cost of devices and thus the consumer market is now becoming un-receptive to what were once standard price points.

Production

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Samsung has a much larger production run for its major devices than most other rivals do.

With respect to price as a factor of manufacturing costs, unlike rivals such as Samsung or even LG, neither HTC nor BlackBerry have production runs as comparably large. This means that every device arguably costs more to manufacture, and therefore part (or all) of that cost is passed onto the customer. It makes sense to keep numbers low, because should any given device fail to sell, it will tangibly end up as a write-off for that fiscal year, similar to Microsoft with its $900 million write off from the original Surface RT.

This is exactly why companies like OnePlus have limited production runs and the invitation system: because they can’t afford to overestimate demand for the international market. In China, the phone is readily sold with no loop-holes. Even Carl Pei has mentioned the invite system as a way to defer waiting times of multiple months while more devices are manufactured, though due to popularity that has even become less realistic.

Wrap Up

While we have discussed some cost-related content in this post, namely the problems and the possible reasons, the ultimate test is what you think. After all, even the best device EVAR is ultimately much less if no one wants to buy it, and companies like Sony have seen this first hand with sales of the PS Vita hardware, for example. While there does seem to be substantial interest in the Priv, it remains to be seen as to how it ultimately fares, as it does the HTC One A9.

What do you think? Are these devices priced too high for their own good? Or are the prices sufficient for the product you would be purchasing? Please feel free to take our surveys below and then drop us your thoughts in the comments section!

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