[BBPandy]

Ailing BlackBerry rides the Android wave in Indonesia

When Natasha Adhalia discovered last month that she could download

BlackBerry Messenger onto any smartphone with the Android operating system, she ditched her clunky Rp4m ($350) BlackBerry handset and bought an en-vogue Samsung Galaxy S4.

�My BlackBerry always seized up and, now that I can get BBM on an Android phone, it�s better to have a Samsung, with access to lots of games and apps,� says the 35-year-old bank worker. �Many of my friends are also stopping using BlackBerry. For a long time, it was popular in Indonesia and people followed the trend. But now the trend is Samsung and other Android phones.�

The troubled Canadian handset maker�s decision to release BBM for Android and Apple�s iPhone in October was a last-ditch attempt to revive its fortunes at a time when it has been haemorrhaging market share in key countries like Indonesia because of its outmoded operating system and handsets.

Industry executives and analysts believe that the rapid take-up of the app, which was downloaded 20m times in its first week, is likely to accelerate the decline in BlackBerry handset sales and provide a big boost to sales of Android phones in markets like Indonesia where BBM is one of the most popular ways to communicate.

But, as the company tries to restructure under a new chief executive backed by a $1bn cash injection, the app could help to cement BlackBerry�s position in the rapidly-expanding new market for universal mobile chat apps.

�With the introduction of the BBM app, they are restricting their mass market of handset customers,� says Raymond Tedjokusumo, chief operating officer of SPC Mobile, which sells low-cost, locally-branded Android smartphones in Indonesia. �But it opens up a huge market for us as people abandon their BlackBerry and move their BBM ID to an Android phone.�

Between 2010 and 2012, BlackBerry built a seemingly unassailable market lead in this fast-growing nation of 250m people thanks to the popularity of BBM, its free messaging service, and its easy-to-use Qwerty keypad.

However, as touchscreen smartphones became cheaper and the number of apps and games available on Google�s Android marketplace soared, BlackBerry lost its top slot in the smartphone market last year.

BlackBerry�s share of new smartphone shipments has fallen from more than 50 per cent last year to less than 20 per cent in the third quarter of this year while Android phones now account for nearly 70 per cent, according to Sudev Bangah, an analyst in the Jakarta office of IDC, a market research group.

�They tried really hard to push the turnover of BlackBerry handsets but the price put people off and there was not enough innovation on the phone or the operating system to attract the new demographic,� he says. �Now, in essence, they�re trying to work out how they co-operate rather than go against whole market in order to gain back their prominence.�

In Indonesia, BlackBerry has switched rapidly from competition into collaboration mode, working with local Android smartphone producers to pre-install BBM onto their phones.

One local phone brand, Cyrus, is already selling a specially-designed Android smartphone for Rp1.5m with a touchscreen, physical Qwerty keyboard and BBM installed.

Mr Tedjokusumo is working on a similar product that will cost as little as Rp600,000.

With sales of cheap smartphones suffering because lower-income families have been hit by rising inflation, he says that the BBM app has been a godsend, pushing up sales by 15-20 per cent.

�A lot of mobile phone users in the middle and lower market know BBM but they don�t really know Android,� he says. �Now it�s much easier to sell our phone as we no longer tell customers it�s an Android, we just tell them it�s a cheap BBM-enabled phone.�

Even BlackBerry�s major international rivals are tapping into the BBM app craze alongside these bargain basement producers.

At the Samsung store in Jakarta�s landmark Grand Indonesia shopping mall, all the smartphones have a sticker featuring the official BBM logo that says they are �Now ready for BBM�.

�We can�t pre-install it yet but 90 per cent of the customers who buy a phone here ask us to download BBM for them,� says a sales assistant.

But although the Samsung Galaxy is the latest smartphone of choice for the brand-conscious Indonesian middle class, the lesson of BlackBerry�s rapid rise and fall is that these technological trends can be short-lived in emerging markets such as Indonesia.

�It�s like the Roman empire,� says Mr Bangah. �It takes a long time to build your dominant position but you can fall very rapidly.�

Ailing BlackBerry rides the Android wave in Indonesia - FT.com

[tmurphx5]

Thanks for posting

Posted via CB10

[garnok]

so now which country BB still on top ? they are losing so many market....many of their key market already being taken by android

[richardat]

so now which country BB still on top ? they are losing so many market....many of their key market already being taken by android

At least this sounds like they understand that their handset days are over in Indonesia and they are trying to move aggressively into bbm software... I'm not optimistic because they are so far behind and so late to the messaging game. I said before that if they finally launch bbm they better then move faster than they've ever moved before ... Have to keep up with the other companies and get advanced features out there to at least match the other services! (But then, I said the same thing about bb10 and they went on the slow train to nowhere)

I think bbm will probably fizzle completely in developed countries, but may still have a chance in these other countries IF they actually execute data be well for once in their life - if some form of bb is around at all - then this is their only semi-plausible business - on the surface.

Do they have it in them to compete? History suggest no, but then again, this is a must-do. Long way to go though. The only thing bb ever showed any foresight on was when Jim pursued this - unfortunate his plan was nixed.

[playbookster]

I thought this was going to be about how 10.2.1 can run 90% of android apps without sideloading lol.

[richardat]

so now which country BB still on top ? they are losing so many market....many of their key market already being taken by android

Haven't checked in a while - perhaps some places like South Africa/Africa. In any case though its only for a short while anyways - sales in those places will quickly drop off - its inevitable. Doesn't really matter in the sense that those places couldn't keep bb Alive in the form they were in anyways. Bottom line is that they are already now a tiny niche maker of phones - and the sales coming in less prominant countries - and even that marketshare is doomed to disappear very quickly.

Bbm will accelerate that....but it was going to happen anyways. It did in every other region... You can't sell bb7 forever, not when android phones abound at all price points.

[richardat]

I thought this was going to be about how 10.2.1 can run 90% of android apps without sideloading lol.

Lol! Uh no.... As I, and I'm sure many others have told you, 10.2.1 won't do a thing for bb10 sales. It doesn't even make rational sense to posit that it would.

[nemo7]

BB10 has to start from the scratch. Like Windows Phone do. BB10 and BBOS are 2 different things. BB10 will grab some Market share back, now chill out. To be honest BB10 especially 10.2.1(i like it so much) is really awesome, if they keep the updates fast they really can fight back.

Posted via BlackBerry Z810

[nairdaotnatus]

BlackBerry 10 is essentially a Research In Motion products. OS 10.0 till leaked 10.2.1 feels like Beta. Maybe after 10.2.1 official and up BlackBerry can put Google Ecosystem to their phones out of the box than there would be a comeback for BlackBerry

Posted via CB10

[gebco]

BB10 has to start from the scratch. Like Windows Phone do. BB10 and BBOS are 2 different things. BB10 will grab some Market share back, now chill out. To be honest BB10 especially 10.2.1(i like it so much) is really awesome, if they keep the updates fast they really can fight back.

Posted via BlackBerry Z810

I agree. They need to shed their old image.

Posted via CB10

[app_Developer]

The BBOS business is going away anyway. It's only a matter of time.

At least they didn't wait until they lost the market, and then try to get users back onto BBM. It sounds like BBM is the standard in Indonesia. So what better time to solidify that position then now?

[playbookster]

Lol! Uh no.... As I, and I'm sure many others have told you, 10.2.1 won't do a thing for bb10 sales. It doesn't even make rational sense to posit that it would.

and neither will cross platform bbm. But the title of the article made it seem like Blackberry is riding on android, not BBM.

[BBPandy]

and neither will cross platform bbm. But the title of the article made it seem like Blackberry is riding on android, not BBM.

I agree completely. The reason I used that title is because it's the title of the article, but it's totally misleading

Posted via CB10

[app_Developer]

and neither will cross platform bbm. But the title of the article made it seem like Blackberry is riding on android, not BBM.

You could argue that BlackBerry, or at least BBRY, is riding on BBM.


Sent from my iPhone 5S using Tapatalk

[grover5]

Lol! Uh no.... As I, and I'm sure many others have told you, 10.2.1 won't do a thing for bb10 sales. It doesn't even make rational sense to posit that it would.

I think 10.2.1 will ultimately continue to grow the sales of BlackBerry 10. In my opinion the suggestion that it would not be rational to consider this is hyperbole.

Posted via CB10

[imcurved]

If BB 10.2.1 is the one then what is BlackBerry waiting for? They need to polish it quick and release it the latest by the end of Q1 2014.
Hopefully once people are familiar with BBM, they will be curious and want to try out BlackBerry device and BlackBerry will be ready with their polished OS.

Post via CB Z10

[garnok]

but the problem for BB today is they already losing one major important thing for business...distribution

carrier, store today already dropping BB, and only offering it online...it is hard for BB to comeback without any support...

[Troy Tiscareno]

The other issue is that each and every one of these phones comes pre-loaded with Google Hangouts, and the latest version is extremely feature-rich and reliable, and will automatically work with most of your contacts (any one with a Gmail account, plus others). And Hangouts is cross-platform (at least a third of the people I communicate with via Hangouts are on iOS, and some are on Windows or Linux desktops).

Once everyone in these markets is using a modern (Android 4.x) phone, there will be less of a reason to use BBM over Hangouts, which is free, more full-featured, cross-platform, pre-installed, and better-integrated on all platforms than BBM.

Had BB released XBBM 2-3 years ago, when BBM was still widely used everywhere, the network effect might have been enough to make it a force to be reckoned with, and it would be mature enough by now to compete with Hangouts and iMessage/FaceTime (and probably would have made WhatsApp an also-ran). But by releasing it in late 2013, feature-incomplete, and with plenty of bugs and problems still present, it's looking more and more like another "too little, too late" situation for BB.

It's too early to know for sure, but the fact that WhatsApp continues to be high on App markets around the world while BBM is rapidly dropping off is a bad, bad sign for XBBM.

[Roo Zilla]

I think 10.2.1 will ultimately continue to grow the sales of BlackBerry 10. In my opinion the suggestion that it would not be rational to consider this is hyperbole.

Posted via CB10

It won't though. In most developed markets where they have a presence, US and EU, they're losing market share. They're not only losing market share, but showing negative sales growth. Losing worldwide market share is acceptable in the wake of the Chinese Android juggernaut if they show positive sales growth like iPhone, but BlackBerry is also selling fewer units as time passes. In developed markets where they never had a serious presence, Korea, Japan et. al., they're not moving. In emerging markets, they're losing the battle to cheap Android handsets.

People don't realize that the cheap Android handsets available in emerging markets are actually very capable phones. It's not like 2 years ago when cheap Android phones were crap. Most of them now have specs that are very competitive with the Z10, and cost less than half. Yes you can say..... "BB10 doesn't need big specs like Android," but in the end, the customer doesn't care. All he sees is.... Z10 for $500 or cheap Android for $200 or less, not to mention the apps bonus in buying Android. Once KitKat becomes the norm, it's going to only get worse because KitKat runs fine on minimal hardware. To a normal price sensitive customer in an emerging market, the proliferation of cheap $100 and less Android handsets is going to be determining factor and it doesn't look like BlackBerry is going to offer anything competitive with that. In the end, that's really the final nail on BlackBerry's coffin.

[JasW]

You could argue that BlackBerry, or at least BBRY, is riding on BBM.

If they are, they better have a backup plan. Currently, BBM is no. 219 in the U.S. on Google Play. Kik, Tango, and WhatsApp are nos. 12, 19, and 20 respectively.

BBM is a complete failure as a business strategy.

[garnok]

If they are, they better have a backup plan. Currently, BBM is no. 219 in the U.S. on Google Play. Kik, Tango, and WhatsApp are nos. 12, 19, and 20 respectively.

BBM is a complete failure as a business strategy.

wow..they are now are on deep problem...

but hey at least even if BB phones sales on indonesia are dropping very very quickly, BBM position on Google play and app store are still in top three in here

[lnichols]

BlackBerry's emerging markets will be decimated by cheaper, more capable (than BBOS) Android devices since they can BBM on Android and non-BIS data plans get cheaper and cheaper. BlackBerry has no device to compete with cheap Android devices.

Posted via CB10

[playbookster]

BlackBerry's emerging markets will be decimated by cheaper, more capable (than BBOS) Android devices since they can BBM on Android and non-BIS data plans get cheaper and cheaper. BlackBerry has no device to compete with cheap Android devices.

Posted via CB10

And they know that. They are pulling out of low end markets, they arent even making low end phones anymore. When they begin to monetize BBM it will replace (in theory) the lost revenue from the low end hardware sales.

[RH1Pearl]

And here's the scary part - the specs on new cheap Chinese smartphones are getting better and better and BlackBerry's current line with no new models in the pipeline will be outdated by middle of next year. No room to sell at both ends of the price spectrum.

[lnichols]

And they know that. They are pulling out of low end markets, they arent even making low end phones anymore. When they begin to monetize BBM it will replace (in theory) the lost revenue from the low end hardware sales.

LOL. I don't think they will be able to replace $5 per month per device almost pure profit off of the mature NOC infrastructure with BBM monetization. Twitter has yet to monetize effectively, Facebook has issues monetizing on mobile, and they are way ahead in the game. BlackBerry hasn't even been advertising or crowing over growth numbers after the 20 million statement. BlackBerry is a disorganized CF of an organization right now and another management change is only going to prolong the chaos in Waterloo.

Also all of BlackBerry's growth since about 2010 was low end device market. The BB10 rollout has shown that they can't compete on the high or mid device market, at least with the current device offering at the current pricing model. The devices are good, I like my Z10, but at the price points they are releasing them at people are choosing the other platforms. So where will they compete?

So basically BlackBerry has the capability to compete, but they have yet to show that they have the will, or the business sense to compete, and every day that passes, the name BlackBerry becomes less relevant and/or more poisonous. I want them to succeed, but it is like watching a favorite football (American) team with inept ownership make mistake after mistake and running the team into the ground. Meanwhile the mega fans just keep saying it is another rebuilding year.