Middle East is fastest growing market for Blackberry maker
Blackberry maker Research in Motion (RIM) has pledged a “substantial” investment in the Middle East in 2012 as it continues to enjoy solid growth in region.
“The Middle East is the largest and fastest-growing market for us,” says Sandeep Saighal, managing director of RIM Middle East. “The growth has been phenomenal and RIM keeps looking to invest in the region, it is one of the most important growth markets for us.”
Sales of the Blackberry smartphones grew 140 per cent year-on-year in the Middle East in 2011. Saudi Arabia is Canada-based RIM’s second largest market with 47 million subscribers and a 173 per cent penetration rate of the devices.
This is in contrast with declining sales in other parts of the world, where RIM falls behind Apple and Android-enabled devices. Sales of Blackberry phones fell 45 per cent in the US in the last quarter.
Without giving a dollar value, Saihgal says the company is looking to increase its presence and invest more locally. It plans to establish a concept store in Dubai later this year, the first of its kind in the region.
Unlike main competitor California-based Apple Inc, RIM has worked closely with local app developers. When the Blackberry Middle East app store was launched in May 2011, it began with 5000 apps, this has grown to 6000 of which 1100 are in Arabic.
In Egypt, it is about to launch the first Blackberry Developer Lab, the first in Africa in collaboration with government entity, the Technology Innovation and Entrepreneurship Centre, to help develop local apps and train local talent.
RIM has also partnered with the Saudi Arabian General Investment Authority (Sagia) to establish the Blackberry Entrepreneurship Academy to accelerate the growth of mobile app development in the kingdom and help support digital entrepreneurs in the country.
“The brand is still strong. They were relatively quick to Arabise the interface and the Blackberry Messenger (BBM) has become a sort of social platform,” says Matthew Reed, senior analyst at UK-based research firm Informa Telecoms & Media.
The BBM, an integrated messaging app, is one of RIM’s biggest strengths and a main factor in its success. According to the company’s own figures, BBM adoption rates stand at 99 per cent in Saudi Arabia and 98 per cent in the UAE. The popularity of this feature was evident in October 2011 when the networks failed and users were left without Blackberry services. Car accidents in Abu Dhabi fell by 40 per cent and there were 20 per cent fewer traffic incidents in Dubai as a direct result of the service outage, according to local authorities.
But the BBM is no longer unique or particularly distinctive. There are now similar messaging systems of which Whatsapp is the best-known and as Apple is focusing more closely on the region, Blackberry may lose its footing in the long run, as it has in Europe and the US. Apple devices now account for 33 per cent of internet traffic in the UAE.
Android-enabled devices are now among the fastest selling smart devices and Google’s strong push in the region is also likely to dent RIM’s hold on the smartphone market.
“The handsets have not really remained at the vanguard or cutting edge of development. They have been slow to introduce the touch-screen devices,” says Reed.
The launch of the Playbook tablet device was delayed giving Apple a headstart in its release of iPad 2. After its initial release, Blackberry swiftly slashed the tablet’s retail price from about AED3,000 ($816) to just AED1, 600. Delays in operating system upgrades and a lack of apps have stunted the success of the Playbook.
The company wrote off $485m at the end of 2011 as a result of unsold Playbooks in its warehouses.
“New rivals have emerged and have set the pace in the smartphone market,” says Reed. “RIM can either remain a premium product focusing on the business sector, or it could target the entry-level smartphone market where there is a lot of growth, but a lot of competition.”