BlackBerry Goes Cheap to Regain Market Share

Jakarta Globe, Muhammad Al Azhari, May 13, 2014

The new Blackberry Z3. (Photo Courtesy of BlackBerry)

Jakarta. BlackBerry has responded to a falling market share in Indonesia by launching its low-cost, touchscreen Z3 smartphone, John S. Chen, the executive chairman and chief executive at the Canadian company said.

The BlackBerry Z3, Jakarta Edition — built exclusively for the Indonesian market — will hit shelves from May 15 with a price tag of Rp 2,199,000 ($191).

When asked how many units he wanted to see sold in Indonesia, Chen said: “I hope to sell lots … but more importantly I want to focus more on market share. I want to increase our market share.”

The Z3 is the first device introduced by BlackBerry under Chen’s leadership.

Jakarta will be the first city to offer the device to consumers before it gets rolled out to other locations.

“Why did I pick Jakarta first? It’s my recognition and my statement that Indonesian consumers are very important for us. In Jakarta, we have lots of customers, in Indonesia we have lots of customers,” said Chen, who took over the helm at the embattled company late last year.

BlackBerry products were at the height of their popularity in Indonesia about three to four years ago in a country once dubbed a “BlackBerry nation.”

Data from the technology research firm, the International Data Corporation (IDC), shows that BlackBerry had a 43 percent market share of the nascent smartphone market in 2011.

However, cut-throat competition has seen its market share decline since then, and its dominance has been eroded by smartphones from brands that use Google’s Android operating system.

According to IDC data, BlackBerry’s market share had declined to 14 percent globally by last year, while that of Android-based phones, including South Korea’s Samsung, had increased to 81 percent.

“We want to go back to [a market share of] around 40 percent. I had a conversation with one of our major distributors today and we both agreed that we should aim at that … by going back to what he said were the good old days,” Chen said.

“It will take us a while for sure, but the first thing we have to reverse is the losing trend,” said the executive who previously served as the chief executive and president of Sybase, a California-based independent software vendor.

He said Jakarta would be the testing ground on how well consumers receive a smartphone priced at under $200.

“We have been losing market share in the last two years and obviously I would like to turn that corner. If I can turn that corner I would view that as successful,” he said.

The BlackBerry Z3 is the first product by FIH Mobile, a subsidiary of Foxconn Technology Group, an electronics contract manufacturing company based in Taiwan, which also assembles gadgets for other manufacturers, including iPhones and iPads for Apple.

The chief at the Waterloo, Ontario-based company voiced optimism that the introduction of a new device aimed at the low-end market, followed by other innovations can help it to improve its financial performance.

BlackBerry posted a loss of $423 million in the first three months of this year, compared with a $4.4 billion loss in the previous quarter.

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