Ailing BlackBerry fights back with budget smartphone

AFP, Tuesday 13 May 2014

BlackBerry on Tuesday launched a new budget handset in Indonesia, one of its last bastions, in the hope it will take off in emerging markets and stem a decline in the smartphone maker's fortunes.

The touchscreen Z3, designed with Indonesia in mind but expected to be introduced in other fast-growing markets later, is the first new BlackBerry phone since chief executive John Chen took the helm of the crisis-hit company in November.

The handset is also the first to be produced from the Canadian firm's partnership with Taiwanese tech giant Foxconn, which also makes gadgets for Apple, and is a key test of whether the new strategy will work.

BlackBerry hopes the Indonesian model -- whose full name is the Z3 "Jakarta Edition" -- will be a hit in Southeast Asia's biggest economy, where the company maintains a loyal following, thanks in part to the popularity of its BBM messaging service.

The phone will be available in shops from Thursday and will cost 2,199,000 rupiah ($190), BlackBerry said in a statement.

But even in Indonesia, the company's biggest market in Asia according to IDC telecoms consultancy, market share has shrunk dramatically in the past year and analysts are sceptical the new phone will do much to help.

"The launch of this device is really BlackBerry's final stand in the Indonesian market," IDC's Sudev Bangah told AFP.

IDC said BlackBerry's market share had collapsed from about 40 percent in 2011 to around five percent in the fourth quarter of 2013, due in particular to fierce competition from Samsung.

It is the same story in other markets worldwide as BlackBerry fights a losing battle to keep up with fierce competition from Apple's iPhone and devices using the Google Android operating system.

The once-dominant smartphone maker has has suffered heavy losses and slashed thousands of jobs in recent years.

The company even put itself up for sale last year but abandoned hopes of finding a buyer several months later, and ousted chief executive Thorsten Heins.

Since Chen took over, there have been small signs of improvement. The company reported a loss of $423 million in the three months to March 1, which was not as bad as had been feared.

As part of its turnaround strategy, the smartphone maker announced the tie-up with Foxconn in December.

It involves transferring manufacturing and inventory management to the Taiwanese company, while allowing BlackBerry to focus on software and services.

At the Jakarta launch, Chen said the company aimed to "re-pivot to make very sure that our customers are taken care of".

He revealed that the phone had been codenamed "Jakarta" during production, adding: "Jakarta is a very, very strong market for the BlackBerry".

The Z3 has a five inch (13 centimetre) touchscreen, without the physical keyboard of the older devices.

The Jakarta Edition's BBM messaging service comes loaded with pictures of local cartoon characters for users to send to one another.

There is also a limited edition with the inscription "Jakarta" on the back.

BlackBerry's most recent phones have not fared well in Indonesia but the company believes the Z3 will be popular, in particular due to its lower price.

Retailers say that online pre-orders, which began on April 28, have been healthy.

Prayudi Aji, who moderates a BlackBerry chat forum with thousands of users, said the long battery life on the new phone would prove popular due to Indonesians' love of chatting.

"Blackberry's market in Indonesia has shrunk but actually (the) phones still have features Indonesians love," he told AFP at the Jakarta launch.

BlackBerry has refused to say which emerging markets it might take the phone to next, but analysts speculated it would likely be others in Southeast Asia.

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