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Back to basics? BlackBerry looks at enterprise tie-ups to sell phones

Experts claim that BlackBerry will not find it easy to sell phones under huge pressure from Chinese brands like Xiaomi and Lenovo along with players such as Samsung, Apple and Reliance LYF

business Updated: Nov 08, 2016 14:59 IST
Anirban Ghoshal
Blackberry

(Reuters)

If you are not interested in a BlackBerry phone, we would not be surprised because the company has lost his recall value.

Its brand recall value also took a hit when it launched the Blackberry Priv earlier this year at a very high price of Rs 62,990 before revising it later in the year.

“We have become a software company,” Narendra Nayak, managing director at BlackBerry India, said after nearly 10 slides of his presentation which somewhat explained that the DNA of the company had changed from being a hardware-led company. Nayak, who was speaking at the launch event of BlackBerry’s Android phones, also said that the software part of the company contributed to more revenue than hardware and this was a proof of the strategy change in the company.

Read more: BlackBerry launches two ‘secure’Android smartphones starting at Rs 21,990

But why is it launching devices then? And that too Android-based smartphones? Vishal Tripathi, research director at Gartner India, believes that the new smartphones, which are effectively cheaper than Priv and as well as glamourous and productive when compared to Pixel, iPhone 7 and Samsung’s S7, is BlackBerry’s enterprises sales pitch to companies, government and financial institutions in India.

“We are pushing the devices in banks, government institutions and companies who need to have secure communications,” Alex Thurber, senior vice president, global device sales, told HT adding that “the companies or institutions approached may buy the enterprise suite or devices but an ideal case would be a combo of both.” Nayak too seconded his comment and added that there was a price imbalance in the Priv but he hopes the company will make up for it with the new smartphones -- DTEK 50 and DTEK 60 -- priced at Rs 21,990 and Rs 46,990 respectively.

However, Tripathi has his concerns as well. “India didn’t take up the concept of BYOD (bring your own devices to work) very well and mostly in cases of security, CYOD (choose-your-own-device) under which the device is mostly given by the company, is practiced. Hence, BlackBerry will not find it easy to sell devices to consumers directly,” Tripathi explained adding that it has to directly approach the institutions. He also said that mobile device management (MDM) is also not very streamlined in the country and BlackBerry has to ensure that productivity is not hit due to security which is an ongoing problem.

Read more: Indians may not buy BlackBerry’s Priv at Rs 62,990

Tripathi is not alone. “Blackberry’s new devices launch is a desperate attempt to pivot its enterprise software sales model of business. It is trying the same model that Google has tried with the Pixel with the only difference that it is a newly turned software company,” Sanchit Vir Gogia, chief analyst at Greyhound Research, said adding that “the combination of software, hardware experience is the winning formula for Apple.”

He further said that the company has a problem of focus and is acting on too many avenues at the same time. “The only reason it is trying its hand in devices is that it is a demonstration unit, which is cheap, and can help institutions to mass adopt the devices in a price-sensitive market like India,” Gogia said adding that the hardware approach in an MDM enterprise sales pitch will take two-three financial years to consolidate.

He also said that the company, which has now turned towards software, also needs a continuous flow of investment in Research and Development, to keep its efforts alive.

BlackBerry CEO John Chen is seen in the picture. Experts also claim that, in the consumer segment, where the company is trying to sell ‘secure phones’, the brand has lost its recall value. (Reuters)

Experts also claim that, in the consumer segment, where the company is trying to sell ‘secure phones’, the brand has lost its recall value. “BlackBerry doesn’t seem very serious in the segment and doesn’t have a diverse portfolio of smartphones to compete with the likes of Lenovo, Samsung, Micromax, Xiaomi or even Reliance Jio’s LYF brand,” Tarun Pathak, senior analyst at Counterpoint Research, said.

Read more:New handset is leap of faith for Blackberry

“If BlackBerry has to play in the consumer segment with the big dogs, the it would need to create awareness about security and this needs a huge advertising, marketing budget which will appeal to the consumers,” he explained adding that the new smartphones are not even manufactured by the company.

However, Thurber believes that the phone is competitive enough. “We have now a productivity bar”, just like Samsung Edge’s bar, and “a new feature of swiping apps,” similar to Pixel and iPhone 7’s force touch, along with a “great camera, big battery and the new security features of BlackBerry.” However, Thurber didn’t reveal any details about manufacturing phones in India.

Chinese handset-maker TCL produces phones for BlackBerry and Optiemus will officially distribute the phones in the country.