BlackBerry is the number one-selling and most widely-used smartphone in South Africa, Nigeria, Saudi Arabia, Indonesia, Columbia and Mexico. Its grip on emerging markets is undeniable.
Sure, snide commenters will point out that BlackBerry is not a smartphone. Yet, it provides for tens of millions of users in these markets their first experience of the internet.
At last week’s BlackBerry World conference in Orlando, Florida, it was grounding to hear some of the stories about markets where accessing the web remains a luxury. Users from Indonesia told about people in that country who were accessing Facebook and updated their statuses without even realising they were using the internet.
Here in South Africa, the same is true. Millions of people connect to the internet via a BlackBerry. It’s not as simple as saying that data costs are high – an equivalent bundle will cost roughly the same as the flat-rated BlackBerry Internet Service. The R59 per month service offers predictability. And it offers unlimited use.
Bob Bose, MD for Benelux, Central Europe and Africa at Research In Motion (the makers of BlackBerry) believes that price is “only a component” of the customer’s purchasing decision. He sees access to the internet almost as the deciding factor.
“Africa is an important market,” says Bose. It’s growing faster on the continent than in Asia, and is expanding its presence on the ground. RIM already has offices in Johannesburg and Nairobi, and will open an office in Lagos in the coming months. With a population of 170m and a mobile phone user base of 100m in the West African giant, it’s easy to see why.
The dynamics of markets in Africa, where prepaid rules (anywhere from 90 to 95% of subscribers are prepaid) makes the continent challenging for BlackBerry. But, already there’s been world-leading innovation on the prepaid front for BlackBerry on our continent.
The fact that a few mega operators like MTN, Airtel (ex Zain), Orange and Vodacom/Vodafone cover almost the entire continent also works in RIM’s favour. It can work with these operators in expanding to new markets.
RIM has also shown that its view of the world is changing. Gone are the product launches in North America. CEO Thorsten Heins points to its four most recent launches being in Europe, the Middle East, India and Indonesia.
Of course, the company will need to regain a foothold in the US (it says this is a priority), or it risks losing its aspirational brand status in emerging markets. But this is far easier said than done. Just ask Nokia.
The real challenge, however, is making sure these tens of millions of loyal users (or should that be “people”?) don’t move to other devices. There isn’t the luxury of a two-year contract lock-in period afforded by developed markets. Churn is high. People carry multiple devices and the cost of switching is just that: the cost of a new handset.
This is why BlackBerry 10 is so critical to the future of RIM.
To remain relevant, it has to make sure that nearly every single current BlackBerry user switches to a BB10 device when they’re ready to upgrade (note: not necessarily when it’s launched). Equally, it needs to make sure its products are accessible to emerging market consumers.
There was a fair amount buried in the deluge of information at BlackBerry World.
The company will continue to support BlackBerry 7 with a dedicated development team in the US. It has to continue innovating on this platform, given its installed base of 70-odd million (and growing). With the leap from OS 7 to 10, there’s already speculation that BB7 users may see some “mini upgrades” to a version 8 and even 9. Crucial for emerging markets.
Licensing remains an option open to the company. Heins says that “most” of RIM’s investigations are “centered around the segmentation of BlackBerry”. There is some speculation that it may seek to license BB10 to other handset manufacturers (ZTE and Huawei perhaps?) for lower-end, cheaper devices. This could provide a valuable bridge to emerging market customers. (There will continue to be a large amount of licensing of the core QNX operating system in a number of verticals like in motor vehicles).
RIM made a few noises throughout the conference about the potential it sees in the India and China markets. It has services in both countries, but right now is hampered on the localisation front. A surprisingly noticeable Chinese media contingent put the question of a Chinese/Mandarin keyboard to Heins in a media-only session. He confirmed that BB10 would have proper Chinese language support. No doubt, there are efforts to ensure full localisation in India too.
If it can crack either of these markets in a meaningful way, and maintain its current leadership in major emerging markets, it may not even need to worry too much about its historical strongholds.
*Hilton Tarrant attended BlackBerry World in Orlando, Florida as a guest of Research In Motion.