By Jennifer LeClaire / CIO Today. Updated February 11, 2013.
Solavei, an upstart carrier of which few have heard, is getting a big break. Solavei is the first U.S. carrier to sell the new BlackBerry Z10. But could the price tag cause so much sticker shock that it drives customers to other carriers instead? Or will an innovative business model disrupt the industry?
Solavei is selling unlocked versions of the BlackBerry Z10 for a whopping $999. Solavei has partnered with GSM Nation on the retail front to peddle the new devices. But, again, how many will line up to pay the premium?
"We believe in giving our members access to the latest phones and wireless capabilities," said Solavei CEO Ryan Wuerch. "Solavei not only gives its members the opportunity to pay less for unlimited mobile service, but even the opportunity to earn income by sharing Solavei with others."
An Outrageous Price
At $999, the BlackBerry Z10 is the most expensive unlocked BlackBerry ever. Unlocked BlackBerry devices usually fall close to the $700 mark, which is in line with the market.
Michael Disabato, managing vice president of Network and Telecom at Gartner, told us he was not buying.
"So BlackBerry is introducing its 'iPhone-killer' through some third-tier, pay-as-you go cheap mobile operator? I have never heard of this carrier. I think the price for this unlocked phone is just outrageous," Disabato said.
He painted this picture: Consumers pay $750 for a 32 GB iPhone unlocked. Consumers pay $850 for a 64 GB iPhone unlocked. That means consumers pay a $150 premium for the BlackBerry. As he sees it, the price is way too high for a BlackBerry. In fact, he said, he wouldn't pay $1,000 for an unlocked smartphone with any brand name because the devices are nearly obsolete as soon as you use them; the next version is always right around the corner.
"I don't think the Z10 is compelling enough for people to abandon Android and iOS, unless it's people who loved BlackBerry in the beginning, went to iOS because it was cool, couldn't get the features they needed, and decided to go back to BlackBerry," Disabato said. "When it comes down to it, it's the software that makes the phone."
Understanding Solavei's Model
Solavei, which bills itself as an affordable contract-free mobile service provider, also sells the iPhone. Both the BlackBerry Z10 and the iPhone are offered at $49 a month for service. That service includes unlimited voice, text and data.
Launched Sept. 21, Solavei has already attracted more than 120,000 members nationwide. Instead of spending millions of dollars on advertising for brand awareness or using retail stores to distribute its services, Solavei relies on its members to share the service and directly compensates them for their efforts. In its first two months, Solavei paid out more than $2 million in member commissions.
Here's how it works: Members who choose to share the Solavei Mobile Service with others through its social commerce platform can use the money to offset their monthly bill and even pocket a few bucks.
The plan allows members to earn $20 per month for every three members -- called a "Trio" -- they or someone directly connected to them signs up for mobile service. When members have three Trios, the income generated is greater than their monthly plan cost of $49, essentially making their mobile service free. Members can continue to increase their recurring monthly income as they sign up more people and their network beyond them grows.