President Obama must be one of the world’s best briefed men, but WiC doubts he is aware that he has been endorsing a locally-made Blackberry-style device in China.
The ad for the Chinese knock-off (the ‘BlockBerry’) cunningly shows a picture of Obama, who’s known to be a fan of the Canadian-made real thing. The tagline below: “Obama’s BlackBerry, my BlockBerry”.
The BlockBerry is no slouch, either. It looks a lot like the BlackBerry Storm, is said to run on Windows Mobile software, offers WiFi, Bluetooth, GPS and 3G wireless capabilities, and is available in one of six colours.
So more competition for Research in Motion – the maker of the BlackBerry device – which is trying to make inroads of its own into the Chinese market.
In December, RIM announced that it had signed a deal with China Telecom to bring the smartphone to its 50 million mobile subscribers. The move follows RIM’s signing of a similar arrangement with mobile carrier China Mobile, which has been offering the BlackBerry devices to large business users in China since 2006.
That includes the launch of a customised version of the device that supports TD-SCDMA, China Mobile’s homegrown 3G standard (see WiC3).
Together, the two distribution deals represent a major push in a market where RIM so far has had a minimal presence.
At present, BlackBerry devices account for less than 1% of smart-phone shipments in China, says research firm IDC. Since its launch almost 75 million BlackBerry handsets have been sold, but virtually all outside China.
“We view China as a strategic market, the largest wireless market in the world,” says RIM’s co-Chief Executive Jim Basillie.
The deals with China Mobile and China Telecom come as RIM battles increasing competition in the market for expensive handsets. Traditional handset makers like Nokia and Motorola have made headway in smartphone sales. The success of Apple’s iPhone has also squeezed BlackBerry’s market.
According to data from Gartner, an information technology research and advisory firm, as of June 30 last year Blackberry’s global market share was 18.7%, up 1.4 percentage points on the previous year. Compare that to the iPhone’s push for global share. Apple’s popular product reached 13.3%, a surge of 10.5 percentage points in the same period.
With the iPhone beginning to win fans in China too (it was formally launched in October, see WiC36), RIM is trying to secure a surer foothold in the world’s fastest growing mobile market.
The BlackBerry deal could also help China Telecom gain ground in the 3G race. The country’s largest fixed-line operator currently lacks a high profile smartphone tie-up and clearly hopes that a relationship with BlackBerry will give it an edge in luring more of an elite customer base to its mobile services.
All the more so, to respond to rival deals. China Unicom is the exclusive distributor for the iPhone and China Mobile recently launched the OPhone, its own version of an Android phone made by Lenovo Mobile.
But China Telecom shouldn’t be expecting a smooth ride, say analysts. RIM is going to face challenges in carving out significant market share.
One far from minor design issue: it remains unclear whether BlackBerry’s easy-to-use “qwerty” keyboard, a hallmark feature in the Western markets, will succeed in China, where language is character-based, rather than alphabetical.
Another major question is price. China Mobile, which has been distributing the BlackBerry smartphone in China since 2006, hasn’t heavily marketed the phone because of its expensive service package. The lowest monthly service charge is Rmb398 ($58) and the cost has been putting off most individual phone users, says Economic Observer.
© ChinTell Ltd. All rights reserved.
Exclusively sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.