Told it won’t take long for that symbol to be itself knocked off, Bose looks stunned for a moment, like a kid wearing a cape who has been told it won’t allow him to fly. Then he begins to laugh; knocked off his talking points, he talks frankly about the airport strikes that have left shipments of marooned BlackBerrys exposed to the elements on the tarmac, the barriers that the Arab world’s revolutions have posed for moving product around the region, and the riots that leave mobile phone shops destroyed.
There’s only so much RIM can do against unpredictable challenges like these, but the company knows it can improve on everything else. Within some 300 phone stores in Nigeria, it is rolling out RIM kiosks. It has launched about 60 software upgrade centres. And it continues to strike partnerships in the country, most recently with local carrier Visafone. In South Africa, meanwhile, BlackBerry Buddies kiosks in malls allow people to upgrade software and chat about keyboard shortcuts with RIM staff–as opposed to unaffiliated phone-shop employees like Albert Samuel. In markets where most people don’t have PCs or laptops, such measures might help ensure a teenager can actually grow up without switching phones.
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It isn’t just RIM, of course, that has come to Nigeria: The head count here for Chinese giant Huawei recently doubled from 600 to 1,200. (The company has 140,000 employees globally; RIM will have only about 11,500 staff by the end of this fiscal year.) Competitors complain that Huawei, a private company, negotiates unfairly low payment schedules for its network operator clients of as much as five years–20 per cent per year–thanks to access to cheap loans from state-owned Chinese banks. By way of response, country manager Pan Fan says that there are a lot of “rumours” in the market. What is indisputable is that Huawei is ruthless and successful: Earlier this year, it overtook Ericsson as the world’s biggest telecom vendor.
Unlike RIM, whose fall in developed markets and shrunken stock have made the company a takeover target, Huawei is able to bide its time. Pan says RIM right now is essentially getting a small slice of a small cake, targeting those Nigerians with enough money to afford a BlackBerry; regardless of whether it’s a top-end Bold or a lower-priced Curve, each device still costs around $200. The real money is to be made when the masses truly start buying smartphones, when the prices dip below the $100 price point prevalent now to $80 and perhaps even $70, Pan says. As with Ericsson, which has failed against Huawei in the telecom infrastructure business, Pan is unimpressed by his old-world rivals in markets upgrading from dumbphones to smartphones. “Nokia, BlackBerry, these two companies declined because of a lack of innovation. It’s not a competitor who beat them–they’ve been left behind,” Pan says methodically. “Right now, the cake is too small. ...We are targeting the big cake.”
For all its might, Huawei is still only getting started here, and, along with firms like Tecno, it faces a bias against “Chinaphones.” The biggest threat of all to RIM is Samsung, the massive integrated South Korean conglomerate that boasts more than 220,000 employees and makes everything from fridges to ships. It is moving into markets like Nigeria fast and hard, and has both cheap and expensive smartphones for sale, with a vast network of service centres and impressive warranties lasting as long as 24 months, in a market where replacing a device can be debilitatingly expensive.
At the high end of the nascent smartphone market here, it’s clear that Samsung is gaining. The company’s sequential growth between the first and second quarters of 2012, according to market research firm IDC, was 511 per cent; for RIM, which has more than 60 per cent of the market, sequential growth was only 70 per cent.
One of RIM’s advantages, on the other hand, is BlackBerry Messenger, or BBM, a tool that helped BlackBerrys spread virally in developing countries, where per-text SMS fees can be onerously expensive for the poor. RIM’s BBM service, which forms a minuscule part of a broader wireless data package, is practically free. But at its core, BBM is just cheap texting; iPhones and Android devices now have comparable services. BBM’s one true advantage is the stickiness–if you switch to a non-BlackBerry phone, you’ll lose your contact list.
RIM has also held on well partly thanks to its technology: BlackBerrys work better on older networks like Nigeria’s because of RIM’s compression technology, and the company’s relay network makes sure messages arrive promptly, even if a cell tower is congested or low on diesel. In the West, this advantage has stopped mattering, and Nigerian telecom veterans believe that, as developing countries move from 2G networks to 3G networks optimized for wireless data, BlackBerrys will fall out of fashion the same way they have in the West.