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BlackBerry Unveils Low-Cost Smartphone in Effort to Win Back Indonesia

Posted on Posted in Industry News

JAKARTA, Indonesia — BlackBerry introduced a low-cost touch-screen device, the Z3, in Jakarta, Indonesia, on Tuesday as the embattled company looks to revive sales in emerging markets, where its once-fervent following has shriveled.

The handset, unveiled at a glitzy event in Jakarta, the Indonesian capital, is the first in a line of devices being made with FIH Mobile, a unit of the giant Taiwanese Foxconn Technology Group. Foxconn, a contract manufacturer, is best known for assembling gadgets for Apple.

The success of the handset, which is retailing for less than $200, could well decide the outcome of BlackBerry’s partnership with Foxconn and its own future in smartphones. The Z3 Jakarta Edition will hit store shelves on Thursday.

“If this device allows them to grow again, even if it’s just small, steady growth, that’s a success in itself. That says there is still room for BlackBerry in Indonesia,” said Ryan Lai, a market analyst at the consultancy IDC.

The Z3 is the first phone to be unveiled by BlackBerry since the new chief executive, John S. Chen, took the helm late last year. It is initially being sold in Indonesia, but will be gradually introduced in other markets as well.

The Waterloo, Ontario-based BlackBerry hopes the device and others to follow will help it regain some of its market share, ceded to the iPhone and Samsung Electronics’s line of Galaxy devices.

“If the market doesn’t receive this product well, then we definitely have some negative issues to deal with,” Mr. Chen said at the unveiling at the Ritz-Carlton hotel in Jakarta.

Just two years ago, the Canadian firm had a 40 percent share of the Indonesian market, shipping more than 600,000 handsets per quarter in a country once known as “BlackBerry Nation.”

But the premium, high-priced BlackBerry 10 introduced last year failed to attract buyers in a country where nearly 40 percent of the population live on about $2 a day. The company’s market share has slumped to just 4 percent, with shipments of about 100,000 devices per quarter, according to IDC.

Indonesia is now dominated by Samsung, which sells about one of every three smartphones in Southeast Asia’s largest economy.

Mr. Chen is betting that the Z3 will help spark a change in the company’s fortunes. The Z3 will be sold at a price below $200 to address one of the big turnoffs for consumers in emerging markets: costliness.

“From conception to delivery, the BlackBerry Z3 Jakarta Edition was designed specifically with our Indonesian customers in mind,” Mr. Chen said in a news release. The device enables users to type in Bahasa, the Indonesian script, and comes with a special set of BlackBerry Messenger, or BBM, Stickers featuring local characters.

This year, BlackBerry will introduce BlackBerry Classic, in partnership with Foxconn. The handset, which will not have a touch screen, will revive command keys and have a trackpad. BlackBerry hopes the move will address the concerns of users who found their new devices hard to navigate.

For Foxconn, the partnership fits with plans to set up a manufacturing plant in Indonesia to build smartphones and other electronic devices. The Taiwanese company’s ambitions have been stalled for years because of drawn-out talks over tax breaks, property and import restrictions.

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