BlackBerry strikes back

Take the case of BlackBerry,the Canadian device maker which invented the concept of on-the-go email more than a decade ago with clunky little devices with a mini keyboard. The gadgets,which offered powerful security features,allowed the company to corner the lucrative market serving business and legal professionals as well as government workers. But competition soon followed and many in that market are now moving to other devices—especially Apple Inc.’s iPhone and mobile phones using Google’s Android technology—leaving BlackBerry struggling to make its mark both at the top and the bottom of a competitive smartphone market.

Related: We are not in trouble: BlackBerry India MD Sunil Lalvani

Cut to the present. BlackBerry is charting a new course by officially adopting its iconic brand name. Its new platform and products are raising eyebrows,especially among those who had written off the company and its previous products. First quarter results for the three months ended June 1,2013 might have prompted ever-deeper skepticism about a long-promised turnaround,but company officials are quick to point out that there are always challenges in the transition period and the company is staying on course for rapid growth in the future.

“During the first quarter,we continued to focus our efforts on the global roll out of the BlackBerry 10 platform,” said Thorsten Heins,president and CEO of BlackBerry. “We are still in the early stages of this launch,but already,the BlackBerry 10 platform and BlackBerry Enterprise Service 10 are proving themselves to customers to be very secure,flexible and dynamic mobile computing solutions. Over the next three quarters,we will be increasing our investments to support the rollout of new products and services,and to demonstrate that BlackBerry has established itself as a leading player in next generation mobile computing solutions for both consumer and enterprise customers.”

BlackBerry’s revenue for the first quarter of fiscal 2014 was $3.1 billion,up 15% from $2.7 billion in the previous quarter and up 9% from $2.8 billion in the same quarter of fiscal 2013. The revenue breakdown for the quarter was approximately 71% for hardware,26% for service and 3% for software and other revenue. North America revenue grew 30%,Asia Pacific revenue grew 35% and Europe,the Middle East and Africa revenue grew 9%. During the quarter,the company shipped 6.8 million BlackBerry smartphones and approximately 100,000 BlackBerry PlayBook tablets.

“You always have challenges in the transition phase and the past 15 months of turnaround have been a little tough for us,” admits Sunil Lalvani,managing director,BlackBerry India. “But we are beginning to turn that around and India is a key spot in this turnaround. In fact,India is one of the largest markets in the world for BlackBerry.” India,according to Lalvani,is in the list of top ten countries for BlackBerry globally,in terms of performance,contribution etc. “BlackBerry Q10 was launched in June and within six weeks of that we launched Q5. In fact,India is the first country in Asia Pacific where we launched Q5,so there is lot of focus coming in from the senior management,” he informs (see interview).

The Indian mobile phone market grew by 24% year-on-year (y-o-y) in 2013 Q1. According to research firm IDC,handset vendors shipped 60.7 million units in 2013 Q1 compared to 48.8 million units in 2012 Q1. The Indian mobile phone market saw a close to 24% increase in shipments y-o-y,driven by the surge in the smartphone shipments over the last year; the smartphone market grew 74% year-on-year from 2012 Q1 to 2013 Q1.

According to CyberMedia Research,India registered 73.5 million mobile handset shipments for the period January-April 2013,registering a growth of 11.1% year-on-year. During the same period,9.4 million smartphones were shipped in the country,a growth of 167.3% on an annual basis.

BlackBerry launched three new BB10 smartphones this year,the touchscreen Z10 device and then the Q10, as well as a less expensive Q5 keyboard device targeted at emerging markets. BlackBerry said it plans to unveil one more lower-priced phone running on its old BlackBerry 7 platform later this year,as it tries to keep market share in price-sensitive emerging markets that are flooded with cheap Android devices.

According to BlackBerry India officials,with the launch of BB Z10,Q10 and Q5 handsets,the company is seeing a rapid adoption of BB10 in the market. A whole lot of existing BlackBerry customers are upgrading and migrating to BB 10. Company officials also reveal that 45% of its customers who have gone and bought the BB 10 devices are first-time users of BlackBerry products.

On its part,BlackBerry India has expanded its channel and distribution networks. A year ago it was present in 80 cities and now it is present in more than 250 cities. Today,it has a market in many small towns. BlackBerry has also made concerted efforts to strengthen its presence in the enterprise segment. “We provide the best enterprise solutions and are still most favoured by the CIO community for the secure communication backbone that we provide to them,” says Lalvani.

Clearly,the Canadian device maker is bouncing back strongly in the Indian mobile phone market.