While most tech journalists and gadget-obsessives focus on hardware makers' "hero" devices — such as Nokia's freshly-launched high-end Lumia 925 — it's the far less glamourous end of the market that can make or break a company like Nokia or BlackBerry.
It's natural for anyone interested in tech to want to know what the newest, fastest or "best" new smartphone is. The truth, however, is that many high-end launches aren't the revolutions they're painted as — they're just the latest step in an iterative process that usually results in a slightly faster processor, a few more megapixels on the camera and a bit of a higher resolution screen.
While high-end handsets are good for drawing the media spotlight for a short amount of time and potentially hitting it big, like the Samsung Galaxy S series, they often fall short in some small way and can quickly fade away — obscured by the next big launch just around the corner. And it's a fiercely competitive market. A CEO's tenure and a company's share price depend on generating headlines with the next flagship handset.
Manufacturers know this, which is why we're increasingly seeing a focus on the developing markets. Today's feature phone user is tomorrow's smartphone owner. Both Nokia and BlackBerry have struggled in recent years, but both have maintained a commitment to holding onto their considerably-sized user bases in such markets for exactly this reason, and both are still as healthy as they are (relatively) as a result of it.
If you add in the fact that other manufacturers that have less of a strong footing in these markets — such as Samsung — are also increasingly introducing low-to-mid range devices, it shows just how the cheaper end of the market is to all manufacturers, not just the strugglers.
It's especially true for BlackBerry, which today announced the Q5 — a BlackBerry 10 handset targeted at emerging markets — and it has also previously said it plans to introduce a mid-range BlackBerry 10 smartphone around June.
The plight of BlackBerry's recent years is well documented, but what receives less attention is just how much the low- to mid-price Qwerty-equipped devices running on older software have continued to prop up the company's financial position.
BlackBerry 10 may well be the future, but the company still sells more BlackBerry 7 devices at the moment — certainly in emerging markets. Add to this that BlackBerry will launch more BlackBerry 7-based devices outside of the US this year and it's clear that the Canadian handset manufacturer knows the importance of not losing ground here.
BlackBerry chief executive Thorsten Heins confirmed as much at the end of March, during the company's most recent financial results.
"BB7 [BlackBerry 7] is still very successful in various markets. We all know this, like the Asia-Pac, EMEA markets, South Africa, Lat-Am. And that's like we always said, we're planning to launch BB7 products to really serve that market segmentation in those countries," Heins said, according to a transcript of the call produced by Seeking Alpha.
It's also important to remember that virtually all of the devices already sold or currently on sale in these markets are mid-tier Qwerty-equipped devices, and it's only so long before other manufacturers roll out more devices with a touchscreen and a Qwerty keyboard. Nokia already has several, and now so does BlackBerry with the Q5. Such devices may not set the world alight in developing markets, but there's a thirst for them elsewhere.
Low-end handsets are also important for another reason: each Asha device, say, chosen over a BlackBerry not only takes away a potential device sale and some market share, but it would also have a negative impact on BlackBerry, the bottom line in lower-service revenues.
For a handset manufacturer fighting to regain market share and stay relevant and visible, a new flagship such as the Lumia 925 is important to have — but that doesn't mean that it's the most key handset to its future. Increasing competition across all tiers of devices in all markets mean no company can afford to rest on their laurels, even when it comes to their cheapest device.