[2ndcrack]

BlackBerry faces a conundrum, how can it expand into the Chinese market without compromising it's value proposition globally? They would have to keep control of their os while competing with Huawei, the world's third-largest manufacturer of mobile phones. But what if they could partner with Huawei to provide bb10 devices to the Chinese market? The advantages for BlackBerry are obvious, being able to establish a presence in China through a huge local firm and very low-cost producer. Huawei would benefit by being able to make devices for an os that is not developed and controlled by a US based company. They could make devices for both os's and avoid total reliance on Android. Huawei might be particularly receptive to this proposal due to the current boycott of their network hardware imposed by the US government.

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[boeingrules]

Sorry, but isn't Xiaomi the third biggest smartphone manufacturer?

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[bspence87]

Okay, there's budget brands and then there is Huawei. The Z3 is at least still a respectable device.
I think that BlackBerry would be embarrassed to see BB10 running on a Huawei. The watered down Android that runs on them now is terribly laggy and slow. A slow, featureless version of BB10 defeats the purpose of it; connectivity, fluidity and productivity.

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[twiggyrj]

Okay, there's budget brands and then there is Huawei. The Z3 is at least still a respectable device.
I think that BlackBerry would be embarrassed to see BB10 running on a Huawei. The watered down Android that runs on them now is terribly laggy and slow. A slow, featureless version of BB10 defeats the purpose of it; connectivity, fluidity and productivity.

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It's more of an issue running an older version of Android (pre Kit-Kat) on commodity hardware, for the OP's suggestion to succeed BlackBerry should optimize BB10 for cheap commodity hardware (1GB and below) and find a non Open Handset Alliance Chinese OEM and it would work making the phone pretty cheap to buy but this could cheapen the BlackBerry brand.

Another alternative is just to get a Chinese OEM to make them to BlackBerry's specification and hopefully with the other OEM's volume of sales should be able to keep the price low.

[Ment]

Huawei is an OHA member going on 6 years so they can't have a BB10 device with android runtime.

[bspence87]

It's more of an issue running an older version of Android (pre Kit-Kat) on commodity hardware, for the OP's suggestion to succeed BlackBerry should optimize BB10 for cheap commodity hardware (1GB and below) and find a non Open Handset Alliance Chinese OEM and it would work making the phone pretty cheap to buy but this could cheapen the BlackBerry brand.

Another alternative is just to get a Chinese OEM to make them to BlackBerry's specification and hopefully with the other OEM's volume of sales should be able to keep the price low.

I understand, but to optimise it would ruin multitasking, connectivity, HUB experience. All the things that make BB10 great.

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[birdman_38]

Huawei is an OHA member going on 6 years so they can't have a BB10 device with android runtime.

Right. BlackBerry would have to find an up and up-and-coming manufacturer that is not an OHA member. Are there any?

[Ment]

Right. BlackBerry would have to find an up and up-and-coming manufacturer that is not an OHA member. Are there any?

Xiaomi would the logical option, MIUI is an android fork so it doesn't come with Google apps and has its own MIUI app store which is fine in China where it dominates. Xiaomi is looking to go into countries where Google apps are popular so it may look to join OHA. If that is on the horizon they wouldn't court BB at all as they would rework MIUI to conform to Google guidelines to be OHA eligible.

There are smaller Chinese companies like Gionee but BB probably wouldn't be interested.

[thurask]

I doubt Western governments would look kindly upon BlackBerry partnering this extensively with a Chinese OEM.

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[Troy Tiscareno]

Huawei is an OHA member going on 6 years so they can't have a BB10 device with android runtime.

They've also supplied entry-level devices for a couple of big manufacturers in the past (Motorola, for one).

[THBW]

Xiaomi would the logical option, MIUI is an android fork so it doesn't come with Google apps and has its own MIUI app store which is fine in China where it dominates. Xiaomi is looking to go into countries where Google apps are popular so it may look to join OHA. If that is on the horizon they wouldn't court BB at all as they would rework MIUI to conform to Google guidelines to be OHA eligible.

There are smaller Chinese companies like Gionee but BB probably wouldn't be interested.

Xiaomi has no interest in joining the OHA. Their current business model is designed to stay clear of the OHA and it has been working exceeding well. Google services have little value in the markets that Xiaomi competes in. TBH, the question is not whether Xiaomi will join but who is going to leave the OHA. There are a lot of companies looking at the exit door and Google's leverage is limited as OEMS are not making money. No profit means no glue to keep the OHA together. It's that simple.

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[THBW]

Huawei is an OHA member going on 6 years so they can't have a BB10 device with android runtime.

Yes, that is correct but it is also actively looking to leave the OHA. When you break it all down, it becomes pretty simple. Companies like Xiaomi literally blew the doors off established companies Huawei, Samsung and Apple. They made a series of very shrewd and smart business decisions including one to stay out of the OHA. Their success is clear and others want to follow. Particularly those that cater to the emerging markets.

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[LuvULongTime]

Yes, that is correct but it is also actively looking to leave the OHA. When you break it all down, it becomes pretty simple. Companies like Xiaomi literally blew the doors off established companies Huawei, Samsung and Apple. They made a series of very shrewd and smart business decisions including one to stay out of the OHA. Their success is clear and others want to follow. Particularly those that cater to the emerging markets.

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Since Google Services are blocked in China, there really is no need for Xiaomi to join the OHA unless I am missing something. However if they want to sell phones in markets where they will be competing with OHA devices that include Google Services then they would have a much tougher time, no? The same challenge BlackBerry is having now WRT to Android minus Google.

[LuvULongTime]

Xiaomi has no interest in joining the OHA. Their current business model is designed to stay clear of the OHA and it has been working exceeding well. Google services have little value in the markets that Xiaomi competes in. TBH, the question is not whether Xiaomi will join but who is going to leave the OHA. There are a lot of companies looking at the exit door and Google's leverage is limited as OEMS are not making money. No profit means no glue to keep the OHA together. It's that simple.

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This has to be a big concern for Google. Things are all rosy now, but as history has taught us (BB with huge market share in 2007) things can change quickly. From a consumer POV, it is amazing to be able to buy a fairly robust Android smartphone at a reasonable cost without a contract. The value proposition is huge especially in emerging markets where BB used to be successful for the same reasons due to BIS. But you have to wonder how long it will last if these companies aren't making any money selling Android devices? Even Google won't sell HW because they know what a PITA it is. The real money is in SW and Services, which, surprise surprise, is where they have their focus. They let all of their stooges in the OHA do the dirty work of manufacturing and selling HW.

[Ment]

Xiaomi has no interest in joining the OHA. Their current business model is designed to stay clear of the OHA and it has been working exceeding well. Google services have little value in the markets that Xiaomi competes in. TBH, the question is not whether Xiaomi will join but who is going to leave the OHA. There are a lot of companies looking at the exit door and Google's leverage is limited as OEMS are not making money. No profit means no glue to keep the OHA together. It's that simple.

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The smartphone part of Xiaomi only made $56M last year. They blew the doors off of units but not profits so the non-OHA business model is not a big enough barrier for change as you might believe. In contrast HTC which is known as a struggling OEM made $20M 3rd quarter as it continues to revamp its product line.

[Tre Lawrence]

This has to be a big concern for Google. Things are all rosy now, but as history has taught us (BB with huge market share in 2007) things can change quickly. From a consumer POV, it is amazing to be able to buy a fairly robust Android smartphone at a reasonable cost without a contract. The value proposition is huge especially in emerging markets where BB used to be successful for the same reasons due to BIS. But you have to wonder how long it will last if these companies aren't making any money selling Android devices? Even Google won't sell HW because they know what a PITA it is. The real money is in SW and Services, which, surprise surprise, is where they have their focus. They let all of their stooges in the OHA do the dirty work of manufacturing and selling HW.

Some folks will disagree with me, but I think Google is less concerned with Android's long term viability as it is being on as many mobile devices as possible with the least effort. In other words, Google wants eyeballs, and doesn't care where they come from. If Android didn't provide that specific ROI, I can see Google having some pause.

As it is, everyone wants (needs?) to be in the mobile space. Google provides the most important thing -- the only ecosystem that can remotely compete with Apple's -- for "free." It's the only thing, IMHO, that keep behemoths like Samsung from unleashing their own OSes.

As long as that status quo exists, I don't think too many OHA OEMs are going anywhere.

But... as you noted, things change quickly.

[anon(832122)]

Some folks will disagree with me, but I think Google is less concerned with Android's long term viability as it is being on as many mobile devices as possible with the least effort. In other words, Google wants eyeballs, and doesn't care where they come from. If Android didn't provide that specific ROI, I can see Google having some pause.

As it is, everyone wants (needs?) to be in the mobile space. Google provides the most important thing -- the only ecosystem that can remotely compete with Apple's -- for "free." It's the only thing, IMHO, that keep behemoths like Samsung from unleashing their own OSes.

As long as that status quo exists, I don't think too many OHA OEMs are going anywhere.

But... as you noted, things change quickly.

Excellent point and let's not forget that Google provides most of it's services and apps to iOS users as well so as you suggest it's eyeballs that Google cares about not device sales.

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[birdman_38]

As it is, everyone wants (needs?) to be in the mobile space. Google provides the most important thing -- the only ecosystem that can remotely compete with Apple's -- for "free." It's the only thing, IMHO, that keep behemoths like Samsung from unleashing their own OSes.

As long as that status quo exists, I don't think too many OHA OEMs are going anywhere.

Microsoft now licences Windows Phone 8.1 for free. But as you mentioned, their market share is nowhere near the Big 2. It did cause a rash of new manufacturers to come on board though.

[TGR1]

Some folks will disagree with me, but I think Google is less concerned with Android's long term viability as it is being on as many mobile devices as possible with the least effort. In other words, Google wants eyeballs, and doesn't care where they come from. If Android didn't provide that specific ROI, I can see Google having some pause.

As it is, everyone wants (needs?) to be in the mobile space. Google provides the most important thing -- the only ecosystem that can remotely compete with Apple's -- for "free." It's the only thing, IMHO, that keep behemoths like Samsung from unleashing their own OSes.

As long as that status quo exists, I don't think too many OHA OEMs are going anywhere.

But... as you noted, things change quickly.

Good points. The one clarification I would add about Android implementations by the OEMs is the patent licensing cost, primarily to Microsoft. That does make the "free" part less palatable.

[LuvULongTime]

Some folks will disagree with me, but I think Google is less concerned with Android's long term viability as it is being on as many mobile devices as possible with the least effort. In other words, Google wants eyeballs, and doesn't care where they come from. If Android didn't provide that specific ROI, I can see Google having some pause.

As it is, everyone wants (needs?) to be in the mobile space. Google provides the most important thing -- the only ecosystem that can remotely compete with Apple's -- for "free." It's the only thing, IMHO, that keep behemoths like Samsung from unleashing their own OSes.

As long as that status quo exists, I don't think too many OHA OEMs are going anywhere.

But... as you noted, things change quickly.

No disagreement about Google wanting to be in mobile. Android was just a means to guarantee their place there. With that said, Samsung, et al, get nothing out of Android other than the profit they make on each device sale. They make no money from search or any of the other Google services. So I will now argue what Troy has been arguing about BlackBerry; if there is no money to be made in selling Android HW, why would a company like Samsung continue to sell devices? Samsung doesn't need to sell smartphones to stay in business. The company is diversified enough that they could safely exit the smartphone business if it was creating a negative on the balance sheet quarter over quarter. This goes for companies like Sony, HTC, etc. And it is only going to get worse for them as android phones get better spec'd and cheaper by companies like Xiaomi. I wouldn't want to be a mainstream Android OEM now.

[2ndcrack]

Under old management BlackBerry had tunnel vision when it came to BlackBerry' product mix. JC is proving to be a much more visionary leader. I'd be surprised if he doesn't initiate a "Google-esque" type move in the coming year to expand BlackBerry's market. China is the most logical "elephant" opportunity. Under the current market conditions the goal would likely be to "grab eyeballs" to expand software and services revenue, there is little opportunity on the hardware side.

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[Troy Tiscareno]

Honestly, BB simply isn't price-competitive enough to sell in China (which is why they withdrew), and certainly doesn't have the status to be an aspirational product (like the iPhone) for those who do have the money to afford them. I have no idea why you think BB would appeal to the Chinese over the options they currently have at the prices that are currently available - perhaps you can explain that?

[LuvULongTime]

Interesting article in today's Globe and Mail discussing Xiaomi and some of the topics covered in this thread. Here are some quotes:

China?s Xiaomi valued at $45-billion with new round of funding - The Globe and Mail

Xiaomi has risen in just three years to become the world’s No. 3 smartphone maker – behind only Samsung Electronics Co. Ltd. and Apple Inc.

At $45-billion, Xiaomi is now worth nearly three times the market capitalization of Lenovo Group Ltd., the world’s No. 1 PC maker

Xiaomi brands itself as an Internet company that eschews traditional marketing and sells hardware at low prices as a distribution channel for its real money maker – software and services

So now I ask, what SW and services do they have? And how will they be any more successful than Samsung who also tried to drift away from dependence on Google? I don't see how they will be successful selling phones when competing against certified Google devices.

This just illustrates how easy it is to rise and fall in this business. Apple is the smartest of the bunch. They want to be the Gucci of smartphones, and it's working for them.

[TGR1]

So I will now argue what Troy has been arguing about BlackBerry; if there is no money to be made in selling Android HW, why would a company like Samsung continue to sell devices? Samsung doesn't need to sell smartphones to stay in business. The company is diversified enough that they could safely exit the smartphone business if it was creating a negative on the balance sheet quarter over quarter. This goes for companies like Sony, HTC, etc. And it is only going to get worse for them as android phones get better spec'd and cheaper by companies like Xiaomi. I wouldn't want to be a mainstream Android OEM now.

Companies like Samsung can't just stay in business - they need to continue to show growth. Mobile has been a major growth area and also has spawned offshoots that also show potentially explosive expansion. I think Samsung has correctly recognized where they need to go but haven't yet figured out how to do it well. It explains why Tizen just won't stay dead but won't arise either - Samsung doesn't want to be just another Android OEM (by far the most successful one to date, if vulnerable) but likely doesn't feel confident that Tizen can give it the oomph to safely shake itself free of Android, or more importantly Google's services.

Samsung has done a good job of making the Galaxy brand desirable, particularly at the lucrative high end. What they aren't doing so well is keeping it there. Not entirely sure why, though.

[Ment]

Interesting article in today's Globe and Mail discussing Xiaomi and some of the topics covered in this thread. Here are some quotes:

China?s Xiaomi valued at $45-billion with new round of funding - The Globe and Mail







So now I ask, what SW and services do they have? And how will they be any more successful than Samsung who also tried to drift away from dependence on Google? I don't see how they will be successful selling phones when competing against certified Google devices.

This just illustrates how easy it is to rise and fall in this business. Apple is the smartest of the bunch. They want to be the Gucci of smartphones, and it's working for them.

Yeah I don't know what Xiaomi long-term strategy is. Once they have all the marketshare they want what do they do with it? Currently they are only making a couple dollars per phone with the help of add-ons: accessory and MIUI themes. Perhaps they are looking to leverage the smartphone base to sell electronics that actually make substantial profits.. Meanwhile Huawei is copying their online only strategy with house brand Honor.