BlackBerry maker Research In Motion just cut their earnings guidance for Q1 2011, blaming slower sales. Even as the future of RIM looks bleak from a US perspective, you wouldn’t think so looking at the South African market. BlackBerries are simply everywhere. I’ve always wondered why BlackBerry has such a large portion of the SA smartphone market, and I can think of
two four reasons:
- Most BlackBerry contracts come with unlimited free data, which (to my knowledge) no other smartphone handset does at a reasonable cost.
- When it comes to business users, it’s still the only phone trusted by corporate IT departments.
- A capable smartphone at a reasonable price (although an influx of cheaper Android and Nokia phones might make this a moot point). (Thanks Steyn for pointing this one out in the comments)
- The popularity and cost-effectiveness of BBM (although WhatsApp largely takes this away as a selling point). (Thanks Stafford for pointing this one out)
Now, here’s where it gets interesting. The latest earnings guidance cut clearly spells big trouble for RIM, and in a great blog post on Forbes, Eric Jackson lists 10 questions he would ask CEO Jim Balsillie based on that news, including the following:
Your bullish analysts used to say “yes, the US business is dying but International is going to keep growing.” You seemed to be saying last night that demand is drying up in Latin America too. Does that mean the US was a sign of what is to come for your future International growth?
Now combine that with a recent IDC report that predicts Africa would become the first truly post-PC continent:
IDC estimates that in South Africa, 800,000 PCs were shipped in 2010 and the number is expected to decline by about four percent annually to reach 650,000 by 2015. Meanwhile, 1.3 million handsets were shipped in 2010 and that rate is expected to increase at a compound annual growth rate (CAGR) of nine percent to reach 2 million annually by 2015.
You have to ask yourself: how long can BlackBerry keep its apparent dominance in the smartphone market in South Africa? As mobile demand increases it appears that they will simply be unable to produce hardware that can keep up with consumers’ ever increasing smartphone requirements.