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Why BlackBerry needs a budget BB10 phone ASAP

A lower-cost phone running BlackBerry 10 could show up at the company's BlackBerry Live conference. CNET breaks down why it's important.

BlackBerry CEO Thorsten Heins introduces the Z10 and Q10 (right).
Sarah Tew/CNET

BlackBerry's next phone announcement doesn't have to be big or flashy. It just needs to be affordable.

With the BlackBerry Z10 and Q10, the company has shown it can make a competitive smartphone. Now it needs a budget-friendly version that it can market to the regions of the world that have shown the most growth over the last few years.

"I think a low-cost phone is critical," said Maribel Lopez, an analyst at Lopez Research. BlackBerry "can still gain traction in emerging markets."

That could come as early as Tuesday, when BlackBerry kicks off its BlackBerry Live event, an annual confab held in Orlando, Fla. All eyes will be on BlackBerry and CEO Thorsten Heins to see what rabbit he pulls out of his hat next.

With images of the rumored BlackBerry R10 popping up, expectations are high that the company will show off the device at BlackBerry Live. It could be the centerpiece of a week focused on fostering developer support, networking with BlackBerry executives, schmoozing with customers and partners, and -- of course -- hanging out with Alicia Keys.

The BlackBerry R10 -- or another low-cost BlackBerry 10 phone -- is an important piece of the puzzle for the company's turnaround bid. The company still has a strong brand in far-flung regions such as India and Brazil, where its BlackBerry Messenger feature still has users hooked. In order to truly grow the number of BlackBerry 10 users, the company needs to get its existing base of emerging-market customers to upgrade.

"When you look at where their sales are strongest, they're in markets where consumers can't afford high-end smartphones," said Avi Greengart, who covers consumer products for Current Analysis.

The high-end market is already a brutal street fight between the various vendors, with Apple and Samsung largely staying above the fray. But increasingly, that fight is being taken to markets where subsidies don't exist and consumers aren't used to spending $600 a phone. If BlackBerry rests on its Z10 and Q10 laurels, it risks losing its still strong position there.

BlackBerry isn't alone in pursuing the low-end market. Nokia just unveiled a phone that shares many of the capabilities of a true smartphone, but retails for $99 without a contract. Apple has long been rumored to be working on a low-end version of its iPhone, with many expecting the company to unveil one this year. Samsung Electronics already makes a wide array of affordable smartphones running on Android.

These markets are ones where the consumer foots the whole bill for a phone, and there isn't a subsidy artificially bringing down the price. That BlackBerry is able to command sales under these concessions is a highly underrated advantage, Lopez said.

Drumming up the hype
Expect BlackBerry to work hard at the confab to create the impression that both of its BlackBerry 10 phones are off to a good start -- whether they really are or not.

Aside from anecdotal evidence and supply checks by industry observers, there are no hard numbers on just how many BlackBerry 10 devices have been sold. The phone had just gone on sale a few days before the company reported its fiscal fourth-quarter results in March. The Z10 didn't go on sale in the U.S. until last month.

While the early word was that the Z10 sold well initially, many see demand slowing as the keyboard-equipped Q10 becomes available.

BlackBerry could provide a little boost and confidence to the base by throwing out some sales figures, providing some assurance that its smartphones are indeed getting bought.

More likely, BlackBerry will stick to its message of creating a platform that's easy for developers to build apps and make money. The company may introduce new tools to developers to get even deeper into the BlackBerry 10 software.

"It's where they tell the faithful: Here's why you should continue to be faithful," Current Analysis' Greengart said.

But will the R10 show up?
Still, there remains some doubt that BlackBerry will actually show off its low-cost BlackBerry device at BlackBerry Live.

The sole purpose of the conference, once known as BlackBerry World, is to drum up hype for its products and services. So, some argue, it may not make sense to unveil a lower-end, less-flashy device to an audience used to the newest whiz-bang announcements.

"If it did come out, I'm not sure if that's the right event for it," Lopez said. "I think people in the U.S. would be underwhelmed by it. It's a flash and branding market here."

Given the leaked images, many suspect the BlackBerry R10 will make an appearance.

What's unlikely is for BlackBerry to introduce a high-end device. BlackBerry's Heins told CNET that it has an exciting "flagship" phone planned, but it will likely launch later this year.

Expectations are a bit higher than before. BlackBerry built up some momentum with the BlackBerry 10 launch. It needs to sustain that with BlackBerry Live.