What’s ailing RIM’s Blackberry drive globally & in India?

02 May,2012

By Ravi Balakrishnan


Don’t let the kid on the next seat in the train, furiously typing away on his or her BlackBerry fool you. Despite the fact that Indian youth have bonded over BBM, the performance of the parent RIM and maybe even the launch of its latest product in India have revealed a number of holes in the phone maker’s strategy. BE asks what’s troubling BlackBerry, boys?


Minutes before Research In Motion, the makers of BlackBerry, made an announcement at a press conference in Delhi, there was a definite vibe of anticipation. Tech hacks idly wondered just what was going to be unveiled, given that BlackBerry has a fairly conservative release schedule.


The more optimistic were holding out for a glimpse of BlackBerry’s OS 10 rumoured among the brand’s faithful to be a potential Android-slaying, iOS-wrecking killer operating system; one that would propel BlackBerry back to the top of its game. But instead, BlackBerry amid much fanfare and celebrity preening unveiled the Curve 9220.


At the Q&A and after, the questions flew thick and fast: why only a 2MP camera? Why no 3G? And why such a stiff price tag for a phone that lacked these two features?


The device was launched at Rs10,990; inexpensive for brand BlackBerry, but a tad pricey compared to other mobiles, even smartphones if one considers budget Android models from Samsung, LG, Spice and Lava among others.


The Curve offered unique features like a quick access BB messenger button and, critically, long battery life, something of a rarity in the smartphone category.


FM radio, a feature that’s bog standard even for phones that are sold at a tenth of the cost, made its way to Blackberry Curve. But to an audience weaned on revolution, having to settle for evolution was a disappointment. It was a dangerous reaction for any company to deal with; especially a tech firm that’s been gradually losing its reputation as a pioneer.


As one of the first smartphones, BlackBerry had a dream run starting with the enterprise segment and slowly making inroads into the consumer space. ‘Sent from my BlackBerry’ soon became a ubiquitous signature; first for emails from globetrotting CEOs and later among the rank and file as well. Except of late, it has taken a beating globally, trounced by the iPhone on the one hand and a gamut of Android powered devices on the other.


Its most recent financial results reveal a loss of $125 million. And shipments of 11.1 million, down 21 per cent from the previous quarter. Reviews for its Torch series have been unenthusiastic and the game changing OS10 is expected to show only in the latter half of 2012. An industry insider said: “They decided to step back and relax and that cost them. The engine has stopped innovating for some time.”


In some countries like India though, BlackBerry still counts among the contenders. According to Frost & Sullivan, it’s at the third place in the Indian smartphone market with a share of 15 per cent, trailing behind Nokia’s 35 per cent and Samsung’s 40 per cent. It’s attracted a strong app developer network of 30,000 in India up from 4,000 two years ago, according to a company source.


More importantly, for a product that’s worldwide reputation veers towards the stodgy, it has a strong traction with the youth. Abhishek Chauhan, senior consultant, ICT Practice, Frost & Sullivan, South Asia & Middle East observed: “In India, they’ve been taking segmentation seriously, targeting the youth. I don’t feel India will be a danger space for them if they launch affordable devices and data plans for their consumers here.”


The youth connect has been built in part on the back of initiatives like the BlackBerry Boys campaign; a co-branded effort with Vodafone, currently in its second year. On the distribution front too, BlackBerry was quick to realise there was a world beyond the metros. It is currently present across 250 cities and according to RIM India’s managing director, Sunil Dutt, it continues to expand.


However, BlackBerry India has not remained unaffected by the pressures facing its parent. The pricing strategy has changed: the jury is out on just why this is happening and what it will lead to. Of late, there have been price cuts across its portfolio.


Coupled with the relatively ‘inexpensive’ tag on the new phone, it indicates either a thawing on part of the company or an act of desperation depending on who you ask. Mr Dutt explains the price cuts: “Sometimes when you reach economies of scale, they allow you to pass on benefits to customers.” This becomes important as the phone reaches towns and cities that want the device but find the price tags forbidding.


Mr Dutt has a different take on discounts. He believes they are not an indication of a brand in trouble but an invitation to consumers to be a part of an ecosystem and experience. “We want to reach more consumers. A lot of them want an affordable solution and we provide just that,” he said.


Marketing consultant Shripad Nadkarni of MarketGate however cautioned that the strategy could well be a double edged sword: “It helps garner short term sales, but the brands future depends on how they keep in synch with innovations of the competition. They can reduce the price of existing products but need to buffer up the offering to be a serious player.”


There seem to be several options and suggestions available to BlackBerry, many offered gratis by various tech columnists. Part of the problem according to industry pundits is that the brand strayed too far away from its enterprise roots and ran the risk of being “everything to everybody.”


The industry insider said: “It is still a high stable platform that gets jobs done in least number of steps. They need to recognise what’s driving them as a company and drive it even harder. BlackBerry 10 could change the way people think about the  company. The question is whether it will be too little too late.”


For the longest time, BlackBerry believed the experience its products offered was good enough for it to command a premium. Even as rivals ramped up the megapixels on cameras, and made their phones more music, game and leisure friendly, BlackBerry’s phones remained on a pound for pound basis, a tad underpowered.


But with the competition evolving at a furious pace and throwing in more for less with each generation of phone, it may be a matter of time before even the BlackBerry boys begin to wonder if the experience is worth the price.


Source: The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved


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