Heavily-discounted BlackBerry Z10 @ Gitex

Some retailers in a popular Dubai electronics fair this week are offering the BlackBerry Z10 at a hefty discount to its launch price.

The Canadian company’s plight is best illustrated this week in Dubai, one of the six cities used in February for the global launch of the operating system and smartphone: the Z10 is being sold at a hefty discount to its launch price at a bi-annual electronics fair here.

Some retailers at the Gitex Shopper are offering the smartphone for as low as 1,000 U.A.E. dirhams ($272), compared with AED2,599 when the phone launched and a current price of AED1,499 in regular stores. And some are also throwing in three months of a six-month contract with a local telco for free as a deal clincher.

Dubai and the wider Persian Gulf region has traditionally been a strong market for BlackBerry with the brand’s messenger app popular among customers. Figures are difficult to come by for the region as a whole, but the U.A.E. telecom regulator in August said that Samsung was the market leader in the country in the second quarter, with 13.8% market share, followed by BlackBerry with 10.7% and Apple with 7.4%. None of the BlackBerry range on the new operating system were among the most popular phones, according to the regulator.

The deals on offer at the fair however seem to be getting a lot of attention. “If you consider the configuration, I do not think there’s a deal as good as this one at Gitex,” says Abhishek Sharma, 20, a student from Dubai. “I’m a BlackBerry lover and the Z10 got a good review.”

Retailers at the Gitex Shopper event say BlackBerry is likely looking to maintain its market share by flooding the market with handsets on the new BlackBerry 10 operating system. Alongside the Z10, the Q10 and Q5 are also being offered at a discount with various “free” add-ons such as tablets and other handsets. This is BlackBerry’s first appearance at the Gitex fair and the brand has a glitzy stand, showcasing Lewis Hamilton’s Mercedes AMG F1 car in a simulator.

“BlackBerry customers still like the brand and the handsets are selling well,” says a senior executive at one of the retailers.

The cost of discounting the Z10 and other handsets meanwhile seems to have already been taken on a corporate level. BlackBerry said last month it would take a charge of nearly $1 billion on its inventory of unsold phones. Analysts at Sanford Bernstein said last week that investors should effectively sell the company’s stock as it will spend a bulk of its cash pile in the next six months.

Even with the negative outlook, executives at BlackBerry are still optimistic. “It’s business as usual,” says Christophe Corsi, country director for the U.A.E. at BlackBerry. “It’s Gitex and the retailers support us in these great offers.”-Wall Street Journal