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Time for Blackberry to shake up China strategy

By Zachary Lowell (Global Times)

08:13, March 01, 2013

The BlackBerry 10 mobile platform is seen after being unveiled January 30, 2013 in New York City.(CNTV Photo)

Reports surfaced last week that struggling Canadian smartphone maker Blackberry Limited was preparing to launch its latest BB10 lineup of mobile devices in China, the world's largest mobile market, at some point in the coming months. For some, this news was an indication that Blackberry was still committed to regaining its former glory even as its dwindling sales and a weakening balance sheet have many concerned that the embattled company is rapidly losing relevance in the global market.

Unfortunately though for Blackberry, formerly known as Research in Motion Limited, the company has long been a peripheral figure in China – by the end of 2012, the company reportedly controlled less than 1 percent of the domestic mobile market, according to media reports citing analyst estimates – and there is little to suggest now that its new lineup will reverse its fortunes. If Blackberry is banking on hitting a home run in China with its new devices (which many say will make or break the company) it may have to radically rethink its strategy for the country or risk continued marginalization in its crowded and unforgiving market.

First of all, I would argue that Blackberry has long struggled to drum up mass consumer appeal in China because of its business-oriented image. While the company has admittedly distanced itself from its roots in corporate culture, it has arguably fallen short of cultivating the sort of trendy aura of fun and all-around convenience so many consumers in China (and elsewhere) gravitate towards when it comes to buying a smartphone.

Unless the company can quickly revamp its image, its lack of objective coolness will continue to be a liability in China, where many consumers express a strong preference for devices which aim to deliver entertainment, social networking and shopping features in addition to productivity tools.

Meanwhile, pricing could be another Achilles' heel for Blackberry's ambitions in China. Early estimates have the company's flagship Z10 device hitting the market in the upper-6,000 yuan ($963.60) range, which would make it one of the most expensive handsets in China.

To put it bluntly, Blackberry could be committing suicide with such prices, especially in light of expert forecasts which predict over 60 percent of China's mobile market going to 3G smartphones priced below 1000 yuan in the year ahead.

The company may want to consider more aggressive pricing for now as it works to cement a foothold in the country. Such a strategy worked for other handset makers in the past. Just look at Xiaomi, the Chinese tech company which shot to prominence in 2011 with its Mi-One, a smartphone packing solid under-the-hood specs, localized features and a price tag of just 1,999 yuan. Within three years, Xiaomi has become one of the biggest tech names in China; and its strategy of emphasizing value has provided a roadmap for other domestic up-and-comers such as Oppo, Coolpad and Meizu, all of which found success after first building up consumer followings with their budget offerings and then branched into higher-end territory.

None of this is meant to suggestion that all is lost for Blackberry though. In fact, the company has made some important early moves in China – it has a decent e-commerce presence in the country and its devices comply with China Mobile's TD-SCDMA standard, placing it in a position to tap one of the world's largest and fastest growing 3G networks. Yet, the company may have to take drastic steps to catch up with the country's flourishing market.

The author is a business editor with the Global Times.

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