BlackBerry versus iPhone in South Africa

The iPhone has taken the smartphone market by storm in the United States, but locally the picture looks a bit different

August 2, 2010
BlackBerry versus iPhone in South Africa

The global smartphone market is showing strong growth.  According to research firm Strategy Analytics global smartphone shipments jumped by 50 percent to 54 million in the first quarter of 2010, up from 36 million for the same period last year.

South Africa is no exception.  With cheaper and more readily available smartphones more local consumers are investing in these devices and businesses are no exception to this trend.  Recent research by World Wide Worx revealed that three quarters of South African companies have deployed smartphones within their organisations.

The much hyped Apple iPhone has become a force in the smartphone market, especially in the United States.  Gartner said that Research in Motion’s (RIM) share of the US smartphone market fell to 41 percent in the first quarter of 2010, down from 55 percent in the previous year.

The combined share held by [Apple] iPhones and [Google] Android handsets rose to 49 percent, from 23 percent over the same period.  Apple’s current US smartphone market share of 24.1% is also expected to rise after the recent launch of the new iPhone 4.

BlackBerry is however not struggling in the global market.  Gartner revealed in May that BlackBerry maker RIM became the world’s fourth-largest handset maker, and it currently has 19.4% global market share in the smartphone arena.  The iPhone, in comparison, has 15.4% market share worldwide.

BlackBerry and iPhone in SA

In South Africa BlackBerry is showing particularly strong growth.  According to Vodacom they have sold 100,000 iPhones to date in comparison to 350,000 BlackBerrys.  Considering that Vodacom had exclusivity on the iPhone until recently while MTN has a strong BlackBerry subscriber base it is clear that BlackBerry has a significantly bigger market share than Apple in the local market.

More detailed and accurate information comes from research by World Wide Worx.  World Wide Worx MD Arthur Goldstuck explains:  “When we measured the penetration of each brand in the local market, and then the propensity to upgrade to each, we found they had the lowest penetration – iPhone near zero percentage, and BlackBerry on 1%.”

“However, BlackBerry had the highest potential percentage growth.The iPhone was expected to go to 1% penetration this year, i.e. matching the penetration BlackBerry had last year, while the BlackBerry was expected to go up to 6% – largely at the expense of Motorola. HTC should not be ignored here: they were expected to go from 2% to 5%,” said Goldstuck.

But what is the reason for BlackBerry’s strong performance in South Africa? 

According to Goldstuck Apple’s strategy of closing off a large chunk of every market in which it signs exclusive distribution agreements is not serving the company well. “In SA, that meant at least 46% of the market was not available to the iPhone,” says Goldstuck.

“That will change now that MTN and Cell C will also be making it available, but Apple has lost enormous momentum in the process. Since the first iPhone appeared, the smartphone manufacturers have upped their game significantly, and BlackBerry, HTC, and Samsung can all claim one or other major catch-up or leapfrog over the iPhone.”

The result, says Goldstuck, is that consumers who have opted for one of those models will have built up brand loyalty for an alternative brand, meaning that they would be even less disposed towards choosing an iPhone.

Another reason for BlackBerry’s success in the country is that some BlackBerry models are now available on very basic contract packages, making it accessible to the entire contract market. “The iPhone is still a high-end phone in this market, and therefore a luxury purchase. It doesn’t have anything to challenge the uptake of the BlackBerry Curve 8520 in the youth market, for example,” said Goldstuck.

The future iPhone versus BlackBerry battle

Goldstuck explains that the iPhone market share in South Africa is currently very low which means that it can only grow, especially when the iPhone becomes available on all networks.

BlackBerry however has many things going for it, including its R59 flat rated data plan and its excellent email capabilities. 

“BlackBerry destroys the iPhone on its home ground, namely e-mail management. iPhone users argue differently, because they become quite religious about their devices, and will offer up strong arguments for the superiority of the iPhone in all respects. The problem is that a steep learning curve is required to experience iPhone e-mail functionality at the same level as the BlackBerry’s. This means that the new user can take instantly to the latter, while taking time to adapt to the former,” says Goldstuck.

The iPhone 4 is expected to hit local shores in a few weeks time which is certain to boost Apple’s presence in the local smartphone market.  BlackBerry is however not sitting back and a few new BlackBerry devices and a brand new Operating System are in the pipeline.

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