The first touchscreen BlackBerry, the Storm, received a mixed reception from reviewers when it launched in late November. But Verizon Wireless, the exclusive U.S. carrier, said earlier this week that the smartphone has taken the market by storm, with one million sold.
Verizon is using that sales figure to counter a report in The Wall Street Journal on Monday, which characterized the Storm’s launch as a “bit of a bumpy start.” Despite a marketing campaign of more than $100 million, the newspaper said, some buyers complained that it was buggy.
Selling at a Loss?
At launch, the Storm was immediately compared to the best-known touchscreen smartphone, Apple’s iPhone 3G. Verizon’s sales figure of one million over about two months compares well with Apple’s sale of about 2.4 million iPhone 3Gs in its first full quarter.
But a new report from iSuppli raises a new area of comparison. The market researcher said that its analysis of the Storm’s components show that not only are the constituent parts more expensive than the iPhone’s, but its maker, Research in Motion, is essentially selling the phone at a loss.
iSuppli indicated that the Storm’s cost of components and manufacturing is a bit less than $203, while the iPhone 3G comes in at less than $175. Software and other costs are not calculated. The Storm and the iPhone are roughly equal in price, about $200, after accounting for the Storm’s rebate.
That comparison misses the point, said Current Analysis’ Avi Greengart. While not commenting directly on the specific pricing assessment by iSuppli, Greengart pointed out that, even if the prices are accurate, “Verizon Wireless is subsidizing the cost of the phone over the life of its contract,” as AT&T is doing with the iPhone.
Keyboard Expectations
Greengart also noted that the news of one million Storms sold is good from a public-relations perspective,…