BlackBuried: Indonesia failings offer lessons for Apple, Samsung

Wed Sep 25, 2013 3:59am EDT
 
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By Jeremy Wagstaff and Kanupriya Kapoor

SINGAPORE/JAKARTA, Sept 25 (Reuters) - Indonesia has long been a surprising jewel in the crown of BlackBerry Ltd, a rare market where its devices enjoyed mass appeal. But the country also highlights the struggling company's failure to embrace the emerging economies that are leading smartphone sales growth across the globe.

Indonesia is still one of BlackBerry's biggest markets, accounting for about 15 percent of global users but its share of smartphone sales in Southeast Asia's biggest economy has fallen fast to 21 percent in the second quarter from 39 percent a year earlier, according to data from telecoms consultancy IDC.

Industry experts say BlackBerry was too slow to capitalise on its handsets' popularity with ordinary Indonesians, a clientele far removed from its traditional corporate and government "CrackBerry" users, a mistake that offers lessons for rivals like Apple Inc and Samsung Electronics Co Ltd.

"Indonesia was an opportunity lost - and at what cost," said a former BlackBerry executive familiar with the company's strategy, who declined to be identified as he did not want to jeopardise business ties with his ex-employer.

As smartphone prices fall and the number of global users rises, companies must either focus on niche markets, like Apple does with its high-end devices, or rapidly roll out a wide range of products at prices that would appeal to all customers, a strategy market leader Samsung has wielded with much success.

BlackBerry's stuttering approach meant it did neither.

After failing to spark interest with its upgraded operating system and devices, BlackBerry said last week it would step back from the consumer market and focus on enterprise customers. It also agreed to go private in a $4.7 billion deal led by its biggest shareholder.

Turning its back on the mass market follows a series of missteps BlackBerry made in lucrative emerging markets like Indonesia, where telecom networks and users embraced the devices long before the firm acknowledged their potential, and the need to tailor its business to make the most of that opportunity.   Continued...