[sam_b77]

So I have a friend who is in one of the big electronic retail chains in India at a senior position and he told me something today which doesn't seem to be good news for RIM in India.

Basically we have one huge retail market in Delhi which sets the trend and those guys are saying that BBs are in a bad shape and they are not selling.Those guys are selling BBs at huge discounts below MSRP and they are saying the market does not look good for BB. These are your basic business retailers with zero loyalty but their experience gauges the trend

Currently all you see in India is BBs in the smartphone segment and iPhone does not exist, but this is definitely bad news. Apparently the cheap androids are grabbing market share like nobody's business.

This would be definitely bad news. I think India will be a challenge for any expensive smartphone manufacturer including iPhone. Android with its cheap devices is definitely making inroads. Cheapest crap android you can get is for $60. Hard to compete with that.

[bitek]

There is 1 Billion people in India. One store cannot change all their minds.

[app_Developer]

Yes, it is difficult to compete with cheap Android phones, which will only be getting cheaper.

This is why people are skeptical that RIM can compete for very long in the low end market with the Curve, while essentially ceding the profitable high end.

Which again, is why BB10 is so critical.

[Economist101]

There is 1 Billion people in India. One store cannot change all their minds.

You didn't read his post very well, because he never claimed the store was changing anyone's mind.

[CrackedBarry]

I'd like to be the first to say, that I think it's despicable and outrageous that Apple has now stooped so low as to bribing middle managers in Indian electronics retailers to tarnish and blacken Blackberries and RIMs good reputation... Unbelievable!

[EveryApp Mobile]

RIM just needs to license BB 10.

[Thunderbuck]

Anecdotal. One manager's experience is not enough to extend out to the entire country.

There may be some basis, there may not.

As for the threat cheap Android presents, I guess I'd have to have a better sense of just what performance/effectiveness/ease-of-use these devices have in comparison; price isn't always the biggest determinant if the device can't do the job you need it to.

[sam_b77]

There is 1 Billion people in India. One store cannot change all their minds.

I did not say one store. I meant one of the electronic distributor hubs in India.A collection of distributors gathered in one notorious market which hold the key for north India. You don't sell to them you are dead. India is different, huge retail chains don't control india, these large scale distributors control India.

They were the smugglers who used to get electronics when India was a closed economy and they now control the electronics sales channel. Even Apple with their special stores can't make any headway without these guys.

In India people who can afford to buy $500 phone do not go to these stores, they have their devices delivered to their homes and these guys do that. Chain electronic stores don't and that's why they make losses.

My friend works in the distribution chain and understands their powers. He was not sharing his store's experiences but the whole market demand scenario. My friend supplies whatever sells. He is not wedded to any platform.

[Rootbrian]

If I was in india, and there was a microwave oven, I would microwave a dozen android phones in it and wouldn't give a hoot what happened. It would be done for great justice.

Alas, the batteries on those cheapo droid phones would probably be 1000 mAh or lessr averaged at 800 mAh.

[sam_b77]

If I was in india, and there was a microwave oven, I would microwave a dozen android phones in it and wouldn't give a hoot what happened. It would be done for great justice.

Alas, the batteries on those cheapo droid phones would probably be 1000 mAh or lessr averaged at 800 mAh.

True, but you have to understand how India works. India had 900 million active cell phone connections at last count. Only 15% of the population can afford the expensive phones. For any other country that 15% is a big number too. But for the rest a cheap android offers a touch screen phone at $50. These are not your typical heavy users or have data plans, so for them the crap battery and android 2.2 works just fine.

Also the distributors who control what sells typically move nearly $1 million of inventory in a month. If something is not selling they would sell below price or at price to move the inventory rather than being stuck with it for more than a month. Their margins are 3% so the bank rate of finance comes into play.

My point on BB was that they would sell at a loss and not order again rather than hold on to it. IPhone doesn't make waves either but the iPhone supply is constricted and hence the price is maintained, BB however is in ample supply and if it doesn't sell, the distributors would liquidate stock and not order again in the same volume. More of a trend indicator.

Even I had a hard time absorbing this since everyone I know who can afford an expensive phone has a BB, but this indicates trend.

Again in the interest of objectivity Jan to March is the slowest quarter in India for everything as Feb is the end of the financial year which means its the yearly tax month. So people hold off all purchases to pay off taxes.

Since the $50 public is not the taxable group, they don't hold off purchases but the high income people do that.

Edit: and everyone has a microwave oven in India.Cheapest microwave start of from $70.

[yauchunh]

bb just gotta make cheaper curves then. cant be worse than a low end lagging android.

[drummer_god]

RIM just needs to license BB 10.

do you think they should license BB10, or something similar under a different name( kinda like how big name appliance manufacturers make sears brand stuff too )?

perhaps make something similar to BB10, but call it QNX. then you can buy a samsung QNX phone. this way you are not undermining BB10 hardware sales.

[sam_b77]

bb just gotta make cheaper curves then. cant be worse than a low end lagging android.

RPU goes down. Already the curves in India are selling below the landed price to a retailer. To get a handle on that check this scenario out:
When the 9900 launched in India everyone wanted it, so the demand went up and RIM came up with a brilliant strategy. The made a bundle of five phones which included two 9780s, two curves and one 9800 for each 9900 that a retailer wanted. The older phones were not moving. RIM marked the retail price of the curves below the landed price to the retailer. Which means that for every 9900 the retailer sold he made a loss on two curves. Now admittedly the markup on the 9900 was enough to subsidise the loss on the curves but they just didn't move. So in essence the retailer got stuck with a huge curve inventory for each 9900. Now retailers being retailers, they created an artificial shortage in the market by not ordering 9900s unless the customers were willing to pay a premium on the MRP, and then liquidating the Curves at a huge discount on their landed price.

On first glance this strategy seems like a winner, but the curve now got stuck at a very low price point and once the 9900 demand fell back to reasonable levels, there was no way RIM could move the curves at the earlier price because the retailers had killed the price of the curves by selling the 9900s at a huge premium. Always remember the market makers are the retailers and they set the price. Rather like the stock market. And the market is much bigger than any one company or stock.

[hootyhoo]

I'd like to be the first to say, that I think it's despicable and outrageous that Apple has now stooped so low as to bribing middle managers in Indian electronics retailers to tarnish and blacken Blackberries and RIMs good reputation... Unbelievable!

I see what you did there.

[sleepngbear]

That certainly isn't good news, at least for India. BB10 isn't going to fix that, either, because the first ones are intended to be high-end phones. If Android manufacturers are going to flood the market with cheap Android phones, there isn't much anybody will be able to do about it except maybe bank on unloading more cheap Curves. And pray.

[sf49ers]

So I have a friend who is in one of the big electronic retail chains in India at a senior position and he told me something today which doesn't seem to be good news for RIM in India.

Basically we have one huge retail market in Delhi which sets the trend and those guys are saying that BBs are in a bad shape and they are not selling.Those guys are selling BBs at huge discounts below MSRP and they are saying the market does not look good for BB. These are your basic business retailers with zero loyalty but their experience gauges the trend

Currently all you see in India is BBs in the smartphone segment and iPhone does not exist, but this is definitely bad news. Apparently the cheap androids are grabbing market share like nobody's business.

This would be definitely bad news. I think India will be a challenge for any expensive smartphone manufacturer including iPhone. Android with its cheap devices is definitely making inroads. Cheapest crap android you can get is for $60. Hard to compete with that.

Rs 9000/- MSRP curve is on its way..may be this April, RIM knows it's market don't worry they got it..Sunil Dutt the now India RIM MD and the ex-Samsunger knows his job well and is a capable guy..he is already in talks to expand BB distribution/retail business to 160 cities from 80 cities in India . They are not planning to sell 9900's to everyone..they reserved it for elite and the Bollywood...9220 and 9320 is what it is and it will be the deathknell for Nokia as it will eat into their keyboard and feature phone marketshare in India.

[missing_K-W]

RIM just needs to license BB 10.

RIM most likely wouldn't license BB10 until it is in the market for a period of time. BB10 needs to show value when negotiating with OEM's....There isn't much to negotiate on until BB10 penetrates the market....Most likely this could be a possibility In 2013.

Negotiations and a licensing agreement could occur, however not likely due to my reason above. All IMHO of course.

[missing_K-W]

RIM expands to include 160 cities in India

http://economictimes.indiatimes.com/...w/11865245.cms

[sam_b77]

Rs 9000/- MSRP curve is on its way..may be this April, RIM knows it's market don't worry they got it..Sunil Dutt the now India RIM MD and the ex-Samsunger knows his job well and is a capable guy..he is already in talks to expand BB distribution/retail business to 160 cities from 80 cities in India . They are not planning to sell 9900's to everyone..they reserved it for elite and the Bollywood...9220 and 9320 is what it is and it will be the deathknell for Nokia as it will eat into their keyboard and feature phone marketshare in India.

I am not suggesting that RIM doesn't know it's job well.

However do appreciate that no single Ceo or executive can beat markets. Sunit Dutt or whoever it is has his task cut out against low end market.

RIM is definitely nicely poised in the Indian market but it was also similarly poised in the US market 4 yrs back. So excuse me if I don't have too much faith in a paid employee who would join Nokia next after Samsung and RIM.

Having said that I also admit that current low sales could also be due to the taxation month and changes in fiscal policy. Known fact that in India most companies curtail operations in Feb. Let's see how this pans out.

As a RIM faithful I hope this is a temporary drop.

[Dapper37]

Sam_B77 Always good info, thanks.
Question, What if RIM was to license its BB OS now that they're close to being done with it. Markets like India are full of people that are getting introduced to smartphones and it would appear to me that BB OS could be Rims new low end OS.
I don't suspect that users in India need much more than can be offered from BB OS in a beginer / introductory smartphone product, if they do they will have BB10?

[sam_b77]

Sam_B77 Always good info, thanks.
Question, What if RIM was to license its BB OS now that they're close to being done with it. Markets like India are full of people that are getting introduced to smartphones and it would appear to me that BB OS could be Rims new low end OS.
I don't suspect that users in India need much more than can be offered from BB OS in a beginer / introductory smartphone product, if they do they will have BB10?

Well it's not "need" but "want" that drives a gadget market. And Indians want the same stuff.

The cheap androids look cool, have a touchscreen and a lot more features.

Also the higher end is seeing a lot of competition with phones like RazrDroid, Samsung note etc all priced significantly below the best BBs.

[Dapper37]

Well it's not "need" but "want" that drives a gadget market. And Indians want the same stuff.

The cheap androids look cool, have a touchscreen and a lot more features.

Also the higher end is seeing a lot of competition with phones like RazrDroid, Samsung note etc all priced significantly below the best BBs.

OK but if RIM was to release it restraints on BBOS it might be able to get development needed, it's not like it would be starting from a dead stop. BB7.1 is not to shaby. If RIM licensed it out and alowed others to do what they want, there you go.
What we are talking about here is price point and access. RIM shouldn't care if it comes on a plastic slab for a low price, from an LG, HTC or Samsung. Low end phones from these makers would look even cooler running BBOS Imo.
Competition is always going to be there. RIM needs to secure its place.

[the_sleuth]

India is a very important market. Especially, where many feature phone users will switch to smartphones in the near future.

sam_b77, thanks for your candid news "on the ground" there. It fits my thesis: Android means the commoditization of the smartphone.

[Dapper37]

India is a very important market. Especially, where many feature phone users will switch to smartphones in the near future.

sam_b77, thanks for your candid news "on the ground" there. It fits my thesis: Android means the commoditization of the smartphone.

Currently its hard to argue with your thesis, making handsets the commodity and the OS the cash cow. Is it possible though that android gets Hampered/crippled in the future by the constraints of the OS architecture?

[luigigosc]

ok let me explaing you sometryn from another similar country view here in venezuela we got to 10million blackberry users last year.

what happen everybody wanted an iphone 4s went it came out so the bb sufer mayor in numbers this last 4 month

but what you have to notice is that the bb that this 1 million ppl had now goes to other users..becouse bb are so good hardware many ppl use a bb for 3 to 4 years...

so my point this is good for rim if there are more bb users rim gets more money each month for bis service...and also if you have more ppl on that bbm contact list is least porblable that you change phones.

so whats have been happening here in the last weeks rim launched the 9360 at a great price so many of those high end users now have 2 phones...and the 9360 is as great phone so they are getting a better bb experience and also they could consider buying a bb10 if it delivers...

RIM needs 20% of the market imho so they can be a super phone maker and i tell you wile there is more bb the better...i have a friend with 3000bbm contacts he bougth a ipod touch for the games end of story.