We are not in trouble: BlackBerry India MD Sunil Lalvani

Excerpts:

Is BlackBerry in trouble again? Recent quarterly results have not been encouraging…

No,BlackBerry is not in trouble. I would be candid to admit that yes indeed,we have had one tough last year or little over the year. But if you analyse historically,there are two reasons to it. BlackBerry was one of the pioneers in the smartphone era with the revolutionary feature of having your e-mails on the move. But the entire mobile industry has evolved and it is evident by the huge influx of new smartphones in the market.

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Even at BlackBerry,our leadership team took a conscious decision that we cannot go on riding on a decade-old operating system and we have to come up with a completely new and revolutionary platform. So we came up with BlackBerry 10. If you compare BlackBerry 10 with BlackBerry 7 platform,it is entirely different experience altogether.

Thus in order to come up with that kind of operating system,there was loads of back-end work required and it took around fifteen months to work on it. For that time taken to build that platform,we were in a transition phase and that is what had an impact on our sales. The people who wanted a BB10 and who could not wait that long,they switched to Android. So obviously there was a market share drop which we witnessed during this phase.

Now with the launch of BB Z10,Q10 and Q5 handsets,we are seeing a rapid adoption of BB10 in the market. When we launched Z10 and Q10,which were in the R40,000-plus segment,these were obviously for a particular segment as not everyone can afford them. But with the launch of BlackBerry Q5 which is the attractive price of R24,990,it’s a perfect device for urban youth.

So these 15 months of turnaround might have been a little tough for us but we are beginning to turn that around. During this period,we have seen that our cash reserve has only grown. Though we had this quarter ritual stuff and we had some loss in that but that’s part of the business because you always have challenges in the transition phase. Despite having some challenges in this quarter,if you see the overall financial foundation of the company,it is still very strong.

Don’t you feel that the market expectations are too high from the company?

I would say both yes and no to the question. When we rolled out our initial BlackBerry devices in the Indian market,it was a huge success. All the devices were in the price category of R25,000 upwards,it was considered as a corporate-oriented device. When we started bringing the prices down some two-three years back and launched the BlackBerry Curve at sub-R10,000,it was a huge success. BBM was a huge hit and BlackBerry Curve was a big success.

But what we were trying to do was to enter in the youth segment which really worked well for us. What we were trying to do was to target both the enterprise user as well the normal consumer. All this worked really well for us,but it set an expectation in the market that there should be constant price drop. BlackBerry is not in a price war. If you look at the market here,there are a lot of devices in the sub $100 category,as in you can get devices for R5,000-6,000 and under. In fact,I would admit that we cannot compete in that sub $100 segment because we know that we cannot come with a sub $100 device and stay profitable. The segment we are playing in is the sub R10,000

category and upwards which is mid-market.

What is it like to be the MD of BlackBerry India,one bright spot in the company’s global operations?

It is indeed extremely interesting,exciting and of course a bit challenging as well. I said exciting because if you see the market in India,there are about 650 million mobile users here of which only 12% are using a smartphone. So it is in itself very exciting and you can make it more exciting for yourself through aggressive marketing strategies.

India is the second fastest growing smartphone market in the world,there is lot headroom,not only for us but for our competitors as well. So it is all about how you differentiate yourself from others,be it through innovation,reaching out to customers…all in all,it is all very dynamic in that term which makes it interesting.

It is challenging at the same time as India is still a price sensitive market and there are expectations from us to build sub-$100 devices and we don’t have one.

Is India the largest market for BlackBerry in Asia Pacific?

No,it is Indonesia in terms of overall handset sales. But in terms of enterprise revenue and enterprise contribution,India is bigger. In Indonesia the consumer base is very big; there is a huge following of BBM there while in India we have a mixed set of consumer who buy a BlackBerry both for the BBM as well as the enterprise services. So there are people from banking domain,IT services or BPOs for whom the security would be a focus while buying a device. Our large chunk of revenue comes in from the enterprise users in India.

What will be your strategy going forward for the India market?

We are built on three fundamental pillars. One is we are going to drive software,services and hardware revenue. Hardware revenue will come in through the device portfolio,we are going to launch more BB 10 and BB 7 devices. So the hardware sales will come in from there.

Talking about software and services revenue for the company,we got 14k BES 10 servers downloads already. In addition,we are seeing BBM going cross platform very soon,that is in a way expanding your social community. A Q5 or a Q10 will be an enabler for that. What this means is that the 60 million plus BBM users globally will grow exponentially in the coming one year. Once you create this strong channel of the BBM community,we’ll roll out the BBM channel. So as a company,you can put your product on the BBM channel and have people subscribe to it.

The third one is going to be the enterprise in a big way. The entire roadmap is evolved with BES 10 to manage devices into the cloud. Our go-to-market strategy is all partner based,we have 9 carrier partners and we have distributor partners like Ingram Micro and Redington; we are going to leverage this network.