RIM Goes From Delusional to Self-Destructive With New High-Priced BlackBerrys

Research in Motion (RIMM) announced a new round of phones. Now Verizon (VZ) has a price on the BlackBerry Bold 9930: $250 with a two-year contract. BGR reports that other carriers, like Sprint (S), plan the same price. That's a big problem for RIM, whose self-delusion is now bordering on self-destruction.

Consider that for less money -- $200 -- you could get an iPhone 4 or a top-line Android unit. Apple (AAPL) and Google's (GOOG) hardware partners offer lower-cost smartphone options as well.

Meanwhile, back in RIM-world, market share is still collapsing, unimpeded by a new version of the BlackBerry operating system that has somehow failed to captivate the masses. In such an environment, pricing a new BlackBerry at a premium to iPhones and Androids is an astoundingly stupid move -- even when measured against RIM's recent history of astoundingly stupid moves.

Too much of a bad thing is terrible

The pricing almost certainly reflects a conscious decision by RIM to overcharge Verizon for the device. Doubtless Verizon would have offered a lower retail price if it thought demand for the new BlackBerry warranted it, or if it got a low enough price from RIM to afford it.

Unsurprisingly, this tactic puts RIM into an untenable position. By charging more than its competitors, the company hopes to bolster its declining average sales prices, which is eroding RIM's earnings. But this new BlackBerry, while getting some decent reviews, doesn't bring a revolution to the category:

By pricing the BlackBerry higher than an iPhone or Samsung Galaxy S (which runs Android), RIM is effectively saying that it offers significantly more value that competitive models. Except that it doesn't. If anything, RIM needs more market share to remain relevant, which would argue for a tactic that Nokia (NOK) will use: underpricing Android phones in the U.S.

Fool me thrice

Were the price an isolated goof, it might be little more than a self-inflicted flesh wound. But it's not isolated:

• The company created the PlayBook tablet, which no U.S. carrier seems to want.
• RIM still hasn't come out with the supposedly-competitive smartphones that run the same operating system as the PlayBook. (Come to think of it, is that really going to be an advantage?)
• Most importantly, the company's co-CEOs think they know it all and are incapable of error.

RIM isn't shooting itself in the foot -- it's pointing a howitzer at its head. The timing just makes it worse. To invoke Ecclesiastes: to everything its season. There comes a time when fixing a problem is no longer possible. RIM may have just hit that point -- if it hasn't already.

Related:

• RIM Going Down for the Second Time as Sprint Dumps the PlayBook
• Why the Heck Would Google Want RIM?
• Behind RIM's Fuzzy Layoff Math: It's Cutting Staff by Hiring
• RIM Lays Off 2,000 Workers -- or Does It?
• RIM is King Lear: Self-Blinded and Waiting for Death
• RIM Earnings Are the Season's New Ugly

Image: morgueFile user mantasmagorical, site standard license.

Erik Sherman

Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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