BlackBerry sales have declined in several key markets as consumers ditch the once-iconic brand in favor of handsets made by rival Samsung, Middle East retailers say.
One large UAE-based electronics chain says its revenues from selling BlackBerry handsets are a little above half what they were a year ago, with the much-heralded BlackBerry 10 (BB10) range having failed to revive the fortunes of the struggling Canadian brand.
The UAE and a handful of other emerging markets had been a glimmer of hope for BlackBerry over recent years, despite its share of the global smartphone market declining, which led to this month’s admission that the company is up for sale.
But several UAE retailers say they are selling far fewer BlackBerrys compared with a year ago, suggesting that the brand is falling behind. Some say this trend being felt across other key markets such as Saudi Arabia.
Ashish Panjabi, chief operating officer for electronics retailer Jacky’s, based in the UAE, reports a drop in BlackBerry sales over the last year.
“In terms of revenue, it’s a little over half it was for last year,” Panjabi told Al Arabiya.
“At the same time last year [BlackBerry] was the number-two brand for us. Now they’re number three. The primary gainer has been Samsung,” he added.
Panjabi said he expects that other retailers have also seen a drop in BlackBerry sales.
Neelesh Bhatnagar, the chief executive of Middle East electronics chain Emax, confirmed the trend.
“BlackBerry over the last couple of years has definitely been on the slide downward, losing market share to the iPhone and Samsung,” he told Al Arabiya.
“Within Emax we have seen BlackBerry's share go down from 19 percent to 12.5 percent [of overall smartphone sales],” Bhatnagar added, citing UAE figures from the first half of 2012 compared with the first six months of this year.
Emax has stores in the UAE, Saudi Arabia, Oman, Qatar and Bahrain. While the figures quoted by Bhatnagar were for the UAE, he said that the trend “would be similar in other countries in the Middle East.”
One former associate of BlackBerry, who is based in Saudi Arabia, confirmed the trend. “A lot of business people I know are switching to other platforms. I am 100 percent sure [BlackBerry] has lost a lot of subscribers in Saudi Arabia”.
Bhatnagar said that traditional BlackBerry features such as email and free messaging are now commonplace in other handsets.
“The key features of the BlackBerry are no longer unique,” he said. “People are deserting BlackBerry and moving on to other platforms… The trend will further accelerate.”
Omar Kassim, founder of the Dubai-based online retailer JadoPado, also reported a decline in BlackBerry sales.
“From what we’re seeing at the moment, Samsung is continuing to grow nicely upwards, while BlackBerry sales have definitely petered out,” Kassim told Al Arabiya. “Over the last six months, we've sold three Samsung devices for every BlackBerry.”
This compares with 2.6 Samsung handsets sold for every BlackBerry in 2012, and 1.34 in 2011, Kassim said, suggesting that the South Korean brand is gaining ground on its Canadian counterpart.
“I personally think the decline [in BlackBerry sales] started post-iPhone in 2007, and now has begun in earnest. The hold-out was the corporate sector, and as we’ve come out of the recession and purchasing and replacement activity picks up pace, those renewals that BlackBerry needs, I suspect are not happening,” he said.
Figures from research firm GfK, supplied to Al Arabiya by a third party, also suggest a decline in BlackBerry’s share of the UAE smartphone market over the first half of 2013. Both GfK and BlackBerry declined to confirm the veracity of those figures.
BlackBerry insists it is “very happy” with its BB10 sales in the Middle East, although declined to provide a breakdown of its overall sales figures for the region.
“We have been very happy with how strongly our BlackBerry 10 smartphone portfolio is selling across the region, particularly with the recent launch of the BlackBerry Q5 smartphone,” Nick Horton, BlackBerry’s managing director for the Middle East and North Africa, told Al Arabiya.
“In May 2013, BlackBerry was the number-two selling smartphone vendor in the UAE and number-three in KSA,” Horton added.
The importance of the Middle East to BlackBerry was underscored in June when the brand opened its first standalone store in the region, located at the Dubai Mall. BlackBerry also chose the UAE as the global launch market for its lower-cost Q5 handset.
Matthew Reed, the principal analyst at Informa Telecoms & Media in Dubai, said some Middle East markets have been favorable for BlackBerry in recent years, amid a gloomier global backdrop.
“There have been two sides to the BlackBerry story,” Reed told Al Arabiya. “BlackBerry has continued to do pretty well in some emerging markets, even as it has had some problems in North America.”
Reed pointed to “much of the Middle East”, as well as South Africa, Nigeria and Indonesia as examples of the emerging markets in which BlackBerry has been strong in recent years.
“The Middle East is still important to them,” he said. “You can see how important this region is for BlackBerry by virtue of the fact they opened a BlackBerry store in the Dubai Mall.”
Despite this, Reed acknowledged that other smartphone brands are seeing rising sales. “iPhone and Android – particularly Android – are growing fast,” he said.
BlackBerry was once seen as a superhero of the telecoms world, an iconic brand in the early days of the smartphone, and championed by everyone from bankers to school kids, from rap stars to Barack Obama.
But many analysts say it has misjudged the smartphone revolution, failing to keep pace with the likes of Apple and Samsung.
Over the last four years, BlackBerry’s share of the global smartphone market has fallen from about 50 per cent to just 3 per cent, according to market research firm IDC. Its financials also followed a downward trend, with BlackBerry reporting an unexpected net loss of $84m in the last quarter.
The Middle East had appeared to buck this trend. Jim Balsillie, BlackBerry’s former co-chief executive, claimed in October 2011 that there had been a 140 per cent year-on-year increase in subscribers in the Middle East, despite a significant decline in its market share elsewhere in the world.
But the global trend has taken its toll. BlackBerry this month acknowledged that it is exploring “strategic alternatives”, including joint ventures, strategic partnerships, or an outright sale.
Reed said the news of a possible sale of the company will not be reassuring to consumers, who may worry about future technical support were BlackBerry to be sold.
“For people who are going to purchase a smartphone, it could be quite off-putting,” Reed said.
Either way, Reed says it is possible that BlackBerry will exit the hardware market altogether, to concentrate on making smartphone software in a similar way to Google and its Android platform.
“The next strategic move might not be a sale as such, it might be more about licensing the software,” said Reed. “I think that’s quite a strong possibility.”
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