BlackBerry fights back with $190 Indonesian smartphone

Troubled Canadian handset maker looks to gain ground lost to giants Samsung and Apple

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BlackBerry on Tuesday launched a new budget handset in Indonesia, one of its last bastions, a major step in the ailing smartphone maker’s fightback against titans Samsung and Apple.

The Z3, designed with Indonesia in mind but expected to be introduced in other emerging 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 makes gadgets for Apple, and is a key test of whether the new strategy will work.

BlackBerry believes 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 despite losing ground in recent years, thanks in part to the popularity of its BBM messaging service.

Like many other global companies, BlackBerry is also targeting Indonesia due to its huge population of 250 million and its rapidly emerging middle class, who increasingly have cash to spend on gadgets following years of sustained economic growth.

“From conception to delivery, the BlackBerry Z3, Jakarta Edition, was designed specifically with our Indonesian customers in mind,” Chen said during a visit to the Indonesian capital to launch the phone.

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

But analysts think it is already too late for a comeback by the company that pioneered the modern smartphone culture but has been unable to keep up with competition from Apple’s iPhone and handsets using the Google Android operating system.

Recent years have been dismal for BlackBerry, and it has suffered heavy losses and slashed thousands of jobs.

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.

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.

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.

But even the picture in Indonesia, one of the company’s healthiest markets, is increasingly dire and the Z3 may be too little too late, analysts warn.

“The launch of this device is really BlackBerry’s final stand in the Indonesian market,” Sudev Bangah from telecoms consultancy IDC told AFP.

IDC says BlackBerry’s market share peaked in Indonesia in 2011 at about 43 percent and remained healthy in 2012, only to suffer a collapse in 2013 when it slumped to around five percent in the final quarter, in the face of stiff competition from Samsung in particular.

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