The Even Worse News for BlackBerry

How It Works
Dec. 20 2013 10:23 AM

Asia and Africa Can’t Save BlackBerry

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A model holds the newly launched BlackBerry Z10 at a shopping mall in Jakarta on March 15, 2013.

Photo by Bay Ismoyo/AFP/Getty Images

As Will Oremus noted this morning, it’s been a dismal year for BlackBerry, which posted a quarterly loss of $4.4 billion. But believe it or not, the news for the Canadian company formerly known as Research In Motion gets worse.

Joshua Keating Joshua Keating

Joshua Keating is a staff writer at Slate focusing on international affairs and writes the World blog. Follow him on Twitter.

The conventional wisdom for a while has been that though BlackBerry is losing ground to the iPhone and Android in the United States and other wealthy markets, it remained the smartphone of choice for the professional class of the developing world. With their free messaging capability, no-frills browsing, and QWERTY keyboard, the BlackBerry makes practical sense over its competitors in places where most business is conducted over phone rather than computer and wireless service can be spotty.

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For instance, BlackBerry has actually gained market share in South Africa this year, up to 23 percent of the cellphone market. Half of Nigeria’s smartphone users are on BlackBerry. Eighteen percent of company’s global users are now in Indonesia.

The company clearly sees its future—such as it is—in these markets. Along with today’s dismal earnings report, BlackBerry also announced a deal with Taiwanese manufacturing giant Foxconn to produce phones for the Indonesian market.

But the company itself acknowledges that these countries are showing signs of shaking their crackberry addiction. In a recent filing with the SEC, the company explained:

The increase in competition encountered by the Company in international markets is due to the recent entry into those markets of global competitors offering high end devices that compete with the Company’s BlackBerry 10 devices, as well as other competitors targeting those markets with lower end Android-based devices that compete with the Company’s lower cost devices. The decline can also be attributed to consumer preferences for devices with access to the broadest number of applications, such as those available in the iOS and Android environments. 

In other words, as the blog TechInAsia recently argued, Indonesians no longer need to buy a BlackBerry to get the BBM messaging service they love, and the brand no longer enjoys the luxury cachet it once had. Things might look a little brighter in Africa, where a Nollywood film called BlackBerry Babes recently hit screens, but as the Economist notes, "it is Chinese firms such as Huawei, ZTE and Tecno which are more likely to erode RIM’s market share: they offer cheaper handsets and smartphones with two SIM cards (which allows customers to use two different networks—handy in a country where wireless service is unreliable). RIM may also suffer as Nigerian operators start to offer Apple’s iPhone.”

Things may look bleakest in India, where BlackBerry’s market share fell from 7 percent to 2 percent this year. On the bright side, the Indian government may have to find a new way to spy on its citizens.