The Indian smartphone segment is expected to see frenetic activity this year as new BlackBerry 10 devices begin jostling for share in an Android-dominated market with the launch of the flagship phone Z10 on 25 February in India.
While BlackBerry executives did not confirm the India price during their briefing on 13 February at their Waterloo headquarters in Canada, reports peg the Z10’s price at around Rs.39,000. Research in Motion Ltd. was renamed BlackBerry on 30 January.
BlackBerry has not fared well worldwide and analysts believe the steep price of the Z10 may not help in a price-sensitive market like India.
A total of 5.5 million smartphones were shipped (not necessarily sold) in the January-July 2012 period in India. Samsung India Electronics Pvt. Ltd led with a 41.6% share, followed by Nokia India Pvt. Ltd’s 19.2% and Blackberry’s 12.1%, according to a report by CyberMedia Research (CMR) in October.
Google Inc.’s Android operating system had a 56.4% share among operating systems followed by Nokia’s Symbian with 17.4%. Apple Inc.’s iOS was way behind with a 3% share while Microsoft Corp.’s Windows Mobile (the Nokia Lumia range of phones) garnered 2.6%, the CMR report said.
According to research firm Convergence Catalyst estimates, BlackBerry’s smartphone market share fell from around 15% in 2011 to less than 8% in 2012 in India.
Globally, the scene is worse. Research firm Gartner Inc., which predicted sales of worldwide smartphone sales to end- users would touch 1 billion units in 2013 in its 13 February report, revealed that Samsung was the leader in both worldwide smartphone and overall mobile phone sales in the December quarter.
Moreover, in the smartphone operating system market, Android captured more than 50%, growing 87.8% in the December quarter, while RIM declined 44.4%, primarily because companies allow employees to “bring your own device”(BYOD), which allows employees to use their personal cellphones for office use by implementing certain levels of security.
Regardless, Thorsten Heins, president and chief executive officer of BlackBerry, believes the Q10 and the Z10—smartphones based on the new BlackBerry 10 platform—will help resurrect the company’s fortunes. While the Z10 is a touch-based phone, the Q10 is Qwerty-based.
“You cannot win in a mature market if you’re a ‘Me Too’ (referring to the strategy of competitors). Our 80 million subscribers want us to be successful and this new platform will help us do so by making us a leader in the mobile computing segment,” he said. Reiterating that India “is one of our very important growth markets”, he said “India is not only about cheap phones.”
Kristian Tear, chief operating officer, said India is roughly a $4 billion market for smartphones that cost over $500 even though it pales in comparison with China (pegged at $40 billion) and the US (around $60 billion).
“BlackBerry remains the most secure platform for enterprises. With Balance (the ability to segregate user and enterprise information), it is resonating with individual users too in the BYOD era,” Tear added.
Without giving numbers because of the company is in the so-called silent period ahead of its earnings announcement, Heins said the launch (of Z10 and Q10 in the Canadian and UK markets in January) “was very successful and better than expected”.
Executives also say they have taken steps to make BlackBerry devices more appealing.
Vivek Bharadvaj, head of software at BlackBerry, said, “We have understood that BlackBerry is not for everyone, all of which helped in designing the new platform (BB10). We had to retain our loyal users, hence the thumb was the unifying factor. We moved away from the common smartphone experience of one app at a time. Now you can continue to open up apps just like you would do it on your computer to another to offer a hyperconnected experience”.
He added that when users buy a BB10 device and set up their email box, “we index the email messages and learn the vocabulary to predict common usage of words”. BB10 also has multilingual prediction, he said, adding, “We have a personalized language model, which is agnostic to language. You can enable up to three languages. A road map is being drawn up for Indian languages too.”
To strengthen the app ecosystem, Marty Mallick, vice president, global alliances and business development, said the company has more than 1,000 global alliances.
“Two years back, we had nothing. Now we have 70,000 apps. In March, we will have beyond 100,000 apps,” said Mallick, adding that the key app categories include gaming, multimedia, published media, business and productivity, social, sports and lifestyle.
BlackBerry’s app ecosystem pales in comparison to Apple’s more than 700,000 apps and Android’s 675,000 but Mallick countered that “very few apps succeed. Around 95% of usage is spent on the top 5% of apps. Hence we focus on the important few.”
BlackBerry has also “enhanced real-time engagement with BBM (BlackBerry Messenger) video that allows for face-to-face conversation as also a group-facing camera with screen share to create a more engaging user experience”, according to Sumit Parab, senior product manager.
Todd Wood, senior vice president of design, added that the overall aim was to “create a cinematic experience with minimal design”, which Don Lindsay, vice president of user experience design, explained was “not about movies but something that fills the screen and every pixel of display.”
BlackBerry has also integrated fragmented regional marketing units under the global leadership of Frank Boulben, the company’s chief marketing officer. “You will soon see the results of this effort,” said Heins.
BlackBerry has simultaneously strengthened its enterprise offering. “BB enterprise service 10 is fully ready at launch. It supports iOS and Android devices, and with Balance, it secures corporate data without restricting a user’s personal experience (to counter the BYOD trend),” said Bob Dawson, vice president of enterprise software programmes.
Will these measures be enough to help BlackBerry regain its stature in a highly competitive smartphone market in which companies such as Apple (iPhone), Samsung (S3 and Note), Google (Nexus4) and Nokia Lumia 920 are gaining ground in the enterprise space—once BlackBerry’s stronghold?
“BlackBerry enjoys a relatively (compared to global markets) strong brand equity in India. BB10 and Z10 could potentially re-strengthen its brand but RIM has a lot of work to do,” said Jayanth Kolla, founder and partner at research firm Convergence Catalyst.
He pointed out that Apple recently stepped up marketing efforts in India, especially with the iPhone 5—appointing distributors, increasing marketing and sales besides offering equated monthly instalments or EMI-based purchase options for the iPhone 5 and iPads.
Besides this, “BlackBerry will also have to compete with the increasing significance of Indian device brands in the smartphone space, especially, in the $150-250 price range. We estimate that the total smartphone share of Indian brands, which was a mere 1-2% in January 2012, has shot up to 25-30% in the December quarter. We see their influence and market share growing into 2013,” Kolla said.
(The author’s trip to Waterloo was sponsored by BlackBerry)