For the Canadian smartphone maker Research In Motion (RIM), the over half-a-decade long Indian journey has been rife with mistakes and learnings. RIM, which makes the BlackBerry smartphone, passed critical milestones here with the still evolving success of its latest entry-level model Curve 8520. RIM itself is undergoing an image makeover by breaking away from the boardroom branding to the now famous “Blackberry Boys” image. With competition from Google’s Android based smartphones made by Samsung, LG, Motorola and HTC as well as Apple’s iPhone, RIM is trying to cement its hold over enterprises without taking eye off the consumer market. RIM’s India head Frenny Bawa spoke to DNA about the opportunities, challenges and the tight rope it is walking on government’s demand to ‘spy’ on its customers using enterprise emails and BlackBerry messenger. Do discussions with the government dilute the enterprise security that forms the cornerstone of the BlackBerry proposition?
We’ve had constructive discussions with the government. Subsequently, we made provision for lawful intercept requests in the case of BlackBerry messenger. For BlackBerry enterprise email service, it is the same standard everywhere and it remains the same. We haven’t changed anything. The thing to remember here is, the concern that the Indian government had in the case of messenger was unique to BlackBerry and we addressed it. The enterprise email service is not unique to BlackBerry, it is an industry issue. So the solution will have to be an industry solution. We hope that the government concedes that is an industry issue.
We’ve had constructive discussions with the government. Subsequently, we made provision for lawful intercept requests in the case of BlackBerry messenger. For BlackBerry enterprise email service, it is the same standard everywhere and it remains the same. We haven’t changed anything. The thing to remember here is, the concern that the Indian government had in the case of messenger was unique to BlackBerry and we addressed it. The enterprise email service is not unique to BlackBerry, it is an industry issue. So the solution will have to be an industry solution. We hope that the government concedes that is an industry issue.
So there is no dilution in the security standards? No concerns raised by your enterprise customers?
There is no dilution. From our perspective we are not compromising in any way. We are not altering anything. We have issued a statement to our consumers, reassuring them.
There is no dilution. From our perspective we are not compromising in any way. We are not altering anything. We have issued a statement to our consumers, reassuring them.
BlackBerry has made mistakes along the way, but in its journey here, is BlackBerry at a stage where you can confidently say that ‘yes, we get India’?
I think so. Absolutely. We’ve been in India for six years. Initially, what we did was export our North American business model to India. And we made our operator partners do very unnatural things. Operators don’t buy the handset, they just sell the services. We realised that Indians don’t go to their service providers to buy handset. They go to their local neighbourhood vendor. Took us a while, but two years ago we tied up with Redington to distribute our handsets available in the open market. In the two years (since), we have grown from just tens of outlets in a handful of metro cities to thousands of points of presence spread across 70 cities. Roughly three years ago, we used to run India operations as a part of this one person in charge of the whole Asia Pacific region. That also meant one strategy for the entire region. Obviously, that doesn’t make any sense. India is very different from Indonesia, which is very different from South Korea or Japan. So now we have that broken down into six regions. We understand that to be successful in this market, we have to do things differently.
I think so. Absolutely. We’ve been in India for six years. Initially, what we did was export our North American business model to India. And we made our operator partners do very unnatural things. Operators don’t buy the handset, they just sell the services. We realised that Indians don’t go to their service providers to buy handset. They go to their local neighbourhood vendor. Took us a while, but two years ago we tied up with Redington to distribute our handsets available in the open market. In the two years (since), we have grown from just tens of outlets in a handful of metro cities to thousands of points of presence spread across 70 cities. Roughly three years ago, we used to run India operations as a part of this one person in charge of the whole Asia Pacific region. That also meant one strategy for the entire region. Obviously, that doesn’t make any sense. India is very different from Indonesia, which is very different from South Korea or Japan. So now we have that broken down into six regions. We understand that to be successful in this market, we have to do things differently.
The latest BlackBerry Curve 8520, was it specifically made for India?
It was definitely designed with India in mind. Our product manager for 8520, a relatively a new hire into RIM Pankaj Grover, was from India and he knew a lot about the market. BlackBerry 8520 was launched in India before it was launched anywhere else in the world. I remember the day, I still remember the gasp in the room when I announced the price of Rs15,000. People couldn’t believe that we were bringing a brand new BlackBerry to the market at that price point.
It was definitely designed with India in mind. Our product manager for 8520, a relatively a new hire into RIM Pankaj Grover, was from India and he knew a lot about the market. BlackBerry 8520 was launched in India before it was launched anywhere else in the world. I remember the day, I still remember the gasp in the room when I announced the price of Rs15,000. People couldn’t believe that we were bringing a brand new BlackBerry to the market at that price point.
But are you making money on the 8520?
We don’t break that out, but I can tell you that we are not losing money on that phone. It is not by any stretch of imaging nation a loss leader. Like I said, it was designed with India in mind and the uptake has been fantastic.
We don’t break that out, but I can tell you that we are not losing money on that phone. It is not by any stretch of imaging nation a loss leader. Like I said, it was designed with India in mind and the uptake has been fantastic.
And the advertising campaign about BlackBerry Boys, was that also just for India?
Yes it was just for India. But I’m told that the Latin American and Middle Easter carriers have launched a very similar campaign based on the Indian version.
Yes it was just for India. But I’m told that the Latin American and Middle Easter carriers have launched a very similar campaign based on the Indian version.
Once an aspirational product, BlackBerry is now seeking to include more sections of the society with products like 8520. With the exclusivity fading away, where do you draw the line?
It is not a mass market product yet. It is still an aspirational product. We are not going for value or volume. We are trying to strike that optimal balance. With the kind of components that we put into our product, it is unrealistic to price it for the mass market. With 8520, we have achieved a new price band. As technology evolves and there are economies of scale, the price becomes lower. We are always on the look out for these opportunities to capture the market. In a market like this, there is an inflection point. If I go sub-Rs10,000 price band, I know I will get customers and market share. So are we doing specific products for India, my response would definitely be yes. So 8520 was our first attempt at doing an entry-level product.
It is not a mass market product yet. It is still an aspirational product. We are not going for value or volume. We are trying to strike that optimal balance. With the kind of components that we put into our product, it is unrealistic to price it for the mass market. With 8520, we have achieved a new price band. As technology evolves and there are economies of scale, the price becomes lower. We are always on the look out for these opportunities to capture the market. In a market like this, there is an inflection point. If I go sub-Rs10,000 price band, I know I will get customers and market share. So are we doing specific products for India, my response would definitely be yes. So 8520 was our first attempt at doing an entry-level product.
RSo with the success of 8520, are you encouraged to look at a sub-Rs10,000 model for the Indian market?
We are always on the look out. Based on the research that has gone into the Indian market, I know that the sub-Rs10,000 price band is a very attractive market. So for me, it is aspirational to get there. I am very encouraged. With technology and design, things are possible. I haven’t ruled it out. But it would still be an aspirational product.
We are always on the look out. Based on the research that has gone into the Indian market, I know that the sub-Rs10,000 price band is a very attractive market. So for me, it is aspirational to get there. I am very encouraged. With technology and design, things are possible. I haven’t ruled it out. But it would still be an aspirational product.
And what about tariffs? Have the carriers brought down the tariffs for BlackBerry plans?
They have actually. Earlier there were only the Rs1,199 and the Rs999 plans, so we worked with the operators to introduce a Biz Lite plan. There were initial concerns from carriers about whether this would cannibalise into the other plans and their revenues will suffer. But we convinced them that the volumes will go up and they went for it. It was a tremendous hit and the interesting aspect is that the Biz Lite customers are migrating to the higher plans. So given that 95% of the Indian subscribers are pre-paid, we worked with the operators to introduce pre-paid plans for our customers. So Vodafone, for instance, has a Rs15 per day plan. So we got out basics right and now we’re focused on constantly bringing out newer products to the market.
They have actually. Earlier there were only the Rs1,199 and the Rs999 plans, so we worked with the operators to introduce a Biz Lite plan. There were initial concerns from carriers about whether this would cannibalise into the other plans and their revenues will suffer. But we convinced them that the volumes will go up and they went for it. It was a tremendous hit and the interesting aspect is that the Biz Lite customers are migrating to the higher plans. So given that 95% of the Indian subscribers are pre-paid, we worked with the operators to introduce pre-paid plans for our customers. So Vodafone, for instance, has a Rs15 per day plan. So we got out basics right and now we’re focused on constantly bringing out newer products to the market.
When can we expect Play Book, the tablet from RIM stable, to be launched in India?
We are hoping to have the launch here within a maximum of a couple of months from its launch in the US. So within the first half of this year, Play Book should be available in India.
We are hoping to have the launch here within a maximum of a couple of months from its launch in the US. So within the first half of this year, Play Book should be available in India.
BlackBerry messenger has been a hit, but it is free. How do you monetise such products where RIM drives operator revenue?
It is a win-win scenario for both the operator and RIM. In a way, BlackBerry messenger replaces SMS as a way of communicating. The popularity of the messaging will drive sales for BlackBerry and the data traffic drives revenue for operators. Going forward depending on the content there could be different way of monetising.
It is a win-win scenario for both the operator and RIM. In a way, BlackBerry messenger replaces SMS as a way of communicating. The popularity of the messaging will drive sales for BlackBerry and the data traffic drives revenue for operators. Going forward depending on the content there could be different way of monetising.
Does RIM have any new plans for the CDMA subscribers?
We have recently tied up with Brightpoint for CDMA distribution. We have also launched a new CDMA product, a flip phone here called the BlackBerry Style.
We have recently tied up with Brightpoint for CDMA distribution. We have also launched a new CDMA product, a flip phone here called the BlackBerry Style.
Apple’s tie-up with Verizon has sparked talks of CDMA-based iPhone being launched in India. So is this a pre-emptive move from BlackBerry?
CDMA users never had a dearth of good devices. BlackBerry is a very attractive option. There are other devices like iPhone that will be available. So we co-exist. BlackBerry has a range of products for the CDMA users, so it’s not just one product.
CDMA users never had a dearth of good devices. BlackBerry is a very attractive option. There are other devices like iPhone that will be available. So we co-exist. BlackBerry has a range of products for the CDMA users, so it’s not just one product.
iPhone is now being used by large enterprises as an alternative to BlackBerry. Is RIM losing its grip over the enterprises?
As time goes by, different corporations make different decisions. But we offer secure communication to enterprises and that is still a very important aspect for enterprises. We have talked a lot about our foray into the consumer space, but I do want to state categorically that it does not in anyway diminish our focus on the enterprises. We do have some very exciting announcements ahead in our road-map for services for the enterprises.
As time goes by, different corporations make different decisions. But we offer secure communication to enterprises and that is still a very important aspect for enterprises. We have talked a lot about our foray into the consumer space, but I do want to state categorically that it does not in anyway diminish our focus on the enterprises. We do have some very exciting announcements ahead in our road-map for services for the enterprises.
