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Research in Motion: Focus on emerging markets

October 31, 2012
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Growing competition in the smartphone market has taken a toll on Research In Motion’s (RIM) performance. The company, which was a leader in this space till the launch of the iPhone in 2007, has been losing market share in global markets to players like Samsung and Apple. According to research firm Gartner, BlackBerry’s share in the Indian smartphone market declined from 14.6 per cent in 2010 to 8.8 per cent in the quarter ended December 2011. This is reflected in RIM’s financial results.

 

However, the company continues to do well in India. RIM’s share in the Indian smartphone market increased from 13 per cent in 2011 to 15 per cent in March 2012. It was the third largest player in the smartphone market after Nokia and Samsung.

RIM entered the Indian market in 2004. Initially, the company positioned itself as a business phone manufacturer, targeting executive officials. The company’s business was driven by professionals that extensively used email services.

From 2009, RIM started targeting other customer segments and appointed Redington India as its retail distribution partner. Currently, BlackBerry smartphones are available at customer touchpoints across 70 cities in India. To provide users a first-hand experience of its products, RIM has also set up 600 BlackBerry Experience Zones within multi-brand stores.

In 2011, RIM shifted its focus to the youth segment as it realised that the adoption of smartphones would be the highest in the 15-24-year age group. RIM’s 2011 advertising campaign titled “We’re the BlackBerry Boys”, in association with its vendor partner Vodafone, established the BlackBerry as an ideal gadget for not only professionals but also for college students.

Moreover, the company’s popular  BlackBerry Messenger (BBM) service has contributed to its success in the country. The application attracted the young customer segment as it offered free messages without requiring internet access.

In order to strengthen its position in the country, RIM continues to focus on its traditional focus area, the enterprise segment. In August 2011, it partnered with channel distributor Ingram Micro to offer BlackBerry mobility solutions. Ingram Micro will retail BlackBerry enterprise solutions in the country including mobile solutions. The alliance is aimed at improving productivity, sales and customer service.

RIM’s increased focus on youth and its popular BBM service have contributed to its success in India. RIM enjoys strong brand equity in the country and sells about 160,000 phones in this market each month. However, it has been involved in a face-off with the government over security issues related to its messenger services.

The company has been facing security issues related to its messenger services in India. The government has asked RIM to provide it access to its messenger and email services to ensure network safety. However, the company has stated that it cannot meet this demand as it does not have the encryption keys for these services.

To strengthen its position in growing markets like India, RIM has taken several initiatives including a cost optimisation and resource efficiency programme, which was announced in March 2012. The programme is aimed at achieving savings of at least $1 billion by the end of 2012-13. RIM is also focusing on streamlining its supply chain. The company is prioritising marketing efforts and investing in regions that offer major opportunities and high returns.

RIM is also pinning its hopes on the launch of its much-delayed new operating system (OS), the BlackBerry 10. The OS is based on QNX, which is used in RIM’s PlayBook tablet. It is a completely different technology as compared to the one used in the previous BlackBerry versions. It will require a new version of the BlackBerry Enterprise Server. Currently, RIM is working on this front. The new OS promises a smooth user experience. It is expected to be launched in the first quarter of 2013.

 

 
 
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