RIM bets on Asia to drive BlackBerry recharge


PETALING JAYA: Research in Motion’s global launch of new Blackberry models in Jakarta, Indonesia, was elaborate. It involved a big stage, traditional dancers and a custom-made batik pattern incorporating the BlackBerry logo. In fact, the batik print was the central theme for the whole extravaganza; the material was draped around the venue and decorated the invitation cards.

To add to the festivities, the new Blackberrys were handed out to all the guests and journalists at the launch. Plus, the first 1,000 people to buy the new smartphones — Bold 9790 and Curve 9380 — when they hit the Indonesian market got them at half price.

Next came another surprise — the phones would for now only be available in Asia; they should be on shelves in Malaysia by early next month. Anyone in North America and Europe wanting these Blackberrys will have to wait until sometime next year for them to start showing up in stores there.

That’s a far cry from the days when BlackBerrys were launched in North America and those of us in Asia had to wait for them to filter down to our part of the globe.

More so because this was the first time in the history of the BlackBerry that the Canadian multinational was launching its product in Asia. Indonesia even got its first BlackBerry Lifestyle Store by the time the party ended.

But it’s not really that surprising if you’ve been following recent news about Research in Motion (RIM) and its BlackBerrys. RIM has been having a nightmare of a year; the company is experiencing declining global market share and BlackBerrys are struggling to compete against more popular Apple’s iPhone 4 and Android-based smartphones from rivals such as HTC, Samsung, and LG, to name a few.

Downward spiral Research company IDC has reported that BlackBerry’s market share declined sharply worldwide in the third quarter of this year. It said RIM’s smartphone market share dropped from 15% globally in third quarter of last year to 10% in the third quarter of this year.

Shipments of RIM smartphones fell from12.4 million to 11.8 million during the same period.

Also, according to IDC, RIM shipments dropped by 58% year-over-year in North America, while its US market share dropped from 24% in third-quarter 2010 to 9% in third-quarter 2011.

Within the enterprise segment — where RIM has long held dominance — a report by research consultancy Ovum has predicted that the company’s hold will diminish in Asia-Pacific over the next five years, with stiff competition from Microsoft’s emerging Windows Phone platform.

Ovum forecasts that market share of BlackBerry devices in the corporate arena will remain stagnant at 25% from 2011 to 2016.

Its principal analyst Pauline Trotter attributed RIM’s shrinking market share to rival products being more appealing. “BlackBerry will remain the overall leader for the forecast period as its strong device management and security capabilities make it a favourite with IT departments,” she said in a statement.

“However, reflecting trends in the consumer smartphone market, Windows Phone and other OS devices will make significant gains. Ongoing improvements in manageability of these device platforms, and support for more business applications, will begin to make these devices much more appealing to enterprise buyers.”

It did not help that in October of this year, the company suffered its worst service outage in its 12-year history. On Oct 10, the company’s e-mail, messaging, and web service went down across the world, starting in Europe, the Middle East and Africa, and eventually spreading to the United States and Canada.

The outage affected more than 10 million customers and struck a blow to the RIM’s long held reputation for reliability. The company said the outages were caused by a “core switch failure within RIM’s infrastructure” and that the failover to a “back-up switch” failed to function properly.

Service was restored on Oct 13, marked by co-CEO Mike Lazaridis issuing a video apology to customers.

Gathering strength All of this saw RIM “regrouping” in Asia, in Jakarta to be exact. The BlackBerry is very popular in that country; there are more than three million Blackberry users in Indonesia. This accounts for 6% of the BlackBerry global user base of 50 million. BlackBerrys are also very popular in these surrounding countries — Thailand, Indonesia and the Philippines.

So it’s a no-brainer why the Bold 9790 and Curve 9380 got launched in Indonesia and is targeted mainly at Asia at this moment in time. And RIM co-CEO Jim Balsillie, who was presiding over the launch, was having no party-poopers in his midst.

He brushed aside all questions about RIM’s declining BlackBerry sales. “The North American market is all about 4G and we have yet to fully introduce our 4G products,” he answered during Q&A time before the launching ceremony. “RIM in fact grew tremendously in Europe, Western Europe and Canada.”

(4G is a fourth-generation cellular wireless telecommunications standard that is just being introduced. It promises faster mobile access to wireless broadband and other services.)

Meanwhile, over here in Asia, RIM believes it continues to attract young users to its products primarily because of the immense popularity of its BlackBerry Messenger (BBM) instant-messenger service.

Gregory Wade, RIM’s regional managing director for East Asia, pointed out that BBM is still growing in terms of user base, with about two million new users a month getting on the chat platform.

“That translates to about 48 new users every second!,” he said. “And about 70% of them are active daily users,” he said.

Wade said the adoption and growth of BBM germinated in South-East Asia, and RIM is seeking to further “extend the social environment.” To further leverage on BBM’s popularity, the company introduced BBM connected apps with version 6 of the platform in July.

These integrated apps allow users to communicate and interact with each other from within the app via the BBM platform, and current offerings include apps such as FourSquare, a location-based social networking website for mobile devices; Wikitude, a mobile augmented-reality software that displays information about the users’ surroundings in a mobile camera view; and Score Mobile, a specialty TV service providing sports, news, information, highlights and live-event programmes.

Asia focus Also, RIM has plans to introduce its BBM Music service in Asia. This service, recently rolled out in the United States, Canada and Australia, allows a user to download up to 50 songs on their BlackBerry for US$4.99 (RM15) a month, and to share their songs with other BBM users.

Wade, however, could not provide a timeframe for when BlackBerry users in Asia would get to enjoy the BBM Music service.

RIM is also turning more to this part of the world when it comes to its BlackBerry developer community. “Our focus is very much on South-East Asia in many respects because it’s a dynamo of growing economies, people who are sophisticated in application development and socially collaborative, it fits perfectly with the value proposition we have to offer,” Wade said.

RIM remains active in supporting and growing its developer community, calling it a key area of focus. “The pinnacle of our efforts to reach out and support the developer community worldwide is the BlackBerry DevCon events,” he said.

This year’s BlackBerry DevCon Asia will be in Singapore, from Dec 7-8. It was relocated from its original host city of Bangkok, Thailand, due to massive floods in that country.

In the Asia Pacific region with its booming middle-class segment, RIM insists it is in an “enviable position” as a smartphone manufacturer. It also has more than three million followers, combined, on its social-media platforms — Facebook and Twitter. And it holds the No 1 position in the Thai, Indonesian and Filipino markets, said Wade.

Asked about the multinational’s “Asia first” launch, he said: “I’ve been based in Asia for the last six years, and have first hand experience of the explosive growth of the mobile market (here). I’ve been waiting for this day.”

Related Stories: Malaysia important to RIM

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