x Abu Dhabi, UAEMonday 24 July 2017

BlackBerry steps up fightback with Indonesia launch of Z3 smartphone

The Z3, which is designed for Indonesia but will likely be introduced in other emerging markets later, is the first new BlackBerry phone since chief executive John Chen took the helm of the company in November.

BlackBerry launches a new budget handset tomorrow in Indonesia, one of its last bastions.

The Z3, which is designed for Indonesia but will likely be introduced in other emerging markets later, is the first new BlackBerry phone since chief executive John Chen took the helm of the company in November.

The handset is the first to be produced from the Canadian firm’s partnership with Taiwanese tech giant Foxconn, which makes gadgets for Apple, and is a test of whether the new strategy will work.

BlackBerry believes the device will be a hit in Indonesia, where it has many loyal customers.

Analysts, however, believe it may already be too late for a comeback by the company that pioneered modern smartphone culture but has been unable to keep up with competition from Apple’s iPhone and handsets using the Google Android operating system.

BlackBerry has suffered heavy losses and slashed thousands of jobs. The company even put itself up for sale last year but abandoned hopes of finding a buyer several months later.

Since Mr Chen took over, there have been small signs of improvement. The company reported a loss of US$423 million in the three months to March 1, which was not as bad as had been feared.

As part of its turnaround strategy, the smartphone maker announced the tie-up with Foxconn in December, which involves transferring to the Taiwan company manufacturing and inventory management, while allowing BlackBerry to focus on software and services.

The Z3 has a five-inch touchscreen, like most of BlackBerry’s newest handsets which do not have the physical keyboards of the older devices.

It is designed with Indonesian consumers in mind. The BBM messaging service, wildly popular in Indonesia, comes loaded with pictures of local cartoon characters for users to send to one another.

There is also a limited edition with “Jakarta” engraved on it.

BlackBerry believes the low price – it will retail for the equivalent of around US$200 – will be a particular selling point.

Previous phones released on the new BlackBerry 10 operating system in Indonesia were more expensive, such as the Z10 which sold for around $700, and received a lukewarm response.

Online pre-orders, which began on April 28, have been healthy, according to retailers.

BlackBerry has refused to say which emerging markets it might take the phone to next, but analysts speculated it would likely be others in Southeast Asia.

But even in Indonesia, one of the company’s healthiest markets, the Z3 may be too little too late.

“The launch of this device is really BlackBerry’s final stand in the Indonesian market,” said Sudev Bangah from IDC.

The telecoms consultancy says BlackBerry’s market share in Indonesia peaked in 2011 at about 43 per cent and remained healthy in 2012 only to suffer a collapse in 2013, when it fell to around 13 per cent.

“Do we expect a mass exodus to this device? Hardly likely,” Mr Bangah said. IDC expects BlackBerry’s market share to fall to around 10 per cent this year.

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