BlackBerry Use in U.S. Is in 'Free Fall,' but Overseas Markets Offer Hope

Blackberry use is the focus of three new reports that offer insight into what's going on at RIM. While there is opportunity overseas, U.S. Blackberry use is said to be in a "free fall."

BlackBerry maker Research In Motion is in a fight for its corporate life, with even once-reliable markets no longer a given for the company€™s smartphones and back-end infrastructure services. However, emerging markets such as India and Indonesia may offer the lifeline RIM needs, according to several new reports.

In the United States, BlackBerry use is in a €œfree fall, according to an April 17 OnForce Confidence Index report. BlackBerry use among field technicians fell to 7 percent during the second quarter, down from 11 percent last quarter, representing a 36 percent drop among BlackBerry use in only three months. Meanwhile€”based on surveys with more than 600 technology professionals€”the company found iPhone use to have ticked up from 24 to 25 percent, while Android smartphone use jumped from 46 percent last quarter to 52 percent currently.

Additionally, analysis firm Ovum, in an April 18 report on how bring-your-own-device (BYOD) policies are driving the mobile-device-management (MDM) market, shared how the mix of devices in the workplace is changing. While just two years ago there were conversations galore about whether iPhones were enterprise-compatible, Apple€™s iOS is now the most-preferred platform, Ovum found, with 40 percent of iPhones managed on MDM platforms, compared with 24 percent of BlackBerry smartphones.

Such findings have become a too-familiar narrative for RIM, where a new CEO has laid out plans for turning the company around, though at a pace analysts find worrisome. The BlackBerry 10 platform, which RIM had hoped would reignite interest from U.S. enterprises and business users, won€™t arrive until the fourth quarter of this year at the earliest.

RIM has for some time enjoyed success abroad€”even as U.S. numbers began slipping€”particularly in developing markets. During an April 2010 earnings call, RIM executives called BlackBerry a €œtop-selling smartphone brand€ and shared that 48 percent of its 2010 fiscal fourth-quarter revenue had come from outside North America. During its most recently completed quarter (its fiscal 2012 fourth quarter), sales outside the United States, Canada and Great Britain were to thank for 68 percent of RIM€™s revenue, up another 7 points from the quarter before.

However, RIM faces building competition for users in areas such as India and South Africa, where Nokia and some makers of low-end Android phones are also vying for first-time smartphone owners.

In an April 18 report, Reuters cites an Ovum analyst who explains that on slow connections RIM is able to offer a better experience than equivalent Android handsets. More than RIM€™s security features€”which have long been highly touted in the United States€”users of such phones are also interested in the BlackBerry Messenger feature, says the report. RIM€™s newest BlackBerry to arrive in India, the Curve 9220, features a dedicated side button for BBM, as well as a built-in FM radio, also thought to be an exciting perk.

While operators in Indonesia, for example, are offering plans as low as $5 a month, according to Reuters, BlackBerry handsets are still priced beyond many potential users€™ reach, not uncommonly costing approximately two months€™ salary.

During the early days of Nokia CEO Stephen Elop€™s tenure, he emphasized the potential Nokia saw in developing markets, especially China. In October 2011, Nokia introduced a line of €œaspirational€ phones for what it said were the €œnext billion€ people to come online. In a presentation that included mini case studies of users in India and South Africa, Elop described the world€™s next billion users as mobile-savvy, really young and living in €œhigh-growth, emerging markets.€ Asha, in Hindi, means hope.

While some suggest RIM doesn€™t yet grasp how critical pricing is in such markets, and what more it can do to make phones more attainable, RIM seems to be banking on the wiggle room that a billion people affords it.

Patrick Spence, RIM€™s global sales chief, told Reuters, €œThe reality is that only 15 percent of people have a smartphone. It€™s still quite early.€