February 06, 2013

Did BB Miss an Opportunity?

By Lai Kok Fung, BuzzCity CEO

Blackberry is trying to reinvent itself with the much-publicised launch of BB10.

But the company is making two big mistakes:

One, it's focusing on the wrong markets.

Two, it should market its product to feature phone users who are on the cusp of upgrading to an affordable smartphone.


Blackberry held launch events for the BB10 in eight markets, which at first glance have a broad geographic range: Dehli, Dubai, Jakarta, Johannesburg, London, Paris, New York and Toronto.

But where is Blackberry already popular?

So, let's take a look at Blackberry's strategy again.

There are a few markets where it is currently focusing that make sense: Toronto is its headquarters, India offers great potential (more on that below) and Dubai is at the centre of the Middle East, a region that is set for growth.

But what's missing?

There's not even one Spanish-speaking market.

Blackberry should also be focusing on Spain and Latin America. Why didn't they include Madrid, Quito, Caracas, Bogota or Buenos Aires?

Plus, among the dozen countries in our list above, eight are emerging markets. Blackberry, though, appears to be evenly splitting its attention between North America and Europe on the one hand and markets in Asia, South Africa and the Middle East on the other.

Feature Phones

As I noted in our column at the beginning of the year, a massive migration from feature phones to smartphones is currently underway.

But feature phone users, particularly in developing markets, still present great opportunities, both current and future. This value is perhaps best seen in the strategies of Facebook, Opera Mini, Twitter and Yahoo. Over the past year or so, these services have worked deals with hundreds of handset developers and carriers to embed their services in feature phones. They want to make sure that they are part of the mobile experience in developing markets.

Clearly, these brands are winning their next generation of users before they migrate from feature phones. Some of these initiatives require big server deployments, as Thomas Clayton points out in TechCrunch, but given the market size, it's a small price to pay. And the benefits may not be that far away.

Meanwhile, in many emerging markets we see a clear drop in the Nokia S40 feature phone and a corresponding rise in smartphones based on Android or iOS. This is perhaps best exemplified in markets like Indonesia and India:

At the same time, as cellphones become cheaper, consumers are replacing their phones faster than before, particularly those running on Symbian, which Nokia discontinued last year. While this churn is prevalent across the globe, it is most notable in emerging markets and presents an opportunity that BB may miss if it is not careful. Moving ahead, the company should focus on emerging (and Spanish-speaking) markets where the opportunities are greatest.