Unlike the fashionable Apple iPhone, or the geeky delight of Android smartphones, Research In Motion (RIM), the Canadian company behind the BlackBerry brand, is famous mostly for making dull, clunky devices designed for a grey-suited corporate market. Given the choice, nobody I have ever met actually wants one.
So you'd think the drawn-out death throes of the company that makes them wouldn't be of much concern to anyone. But you'd be wrong.
Not only would the company dispute, in the strongest possible terms, my opinions about its products and its financial health, but the BlackBerry's extreme popularity poses a conundrum.
BlackBerry user numbers in South Africa run deep into the millions, compared to only a few hundred thousand each for iPhone and Android competitors. It owns a 44% share of the market, well ahead of its nearest rival, Nokia, with 27%. By contrast, smartphone operating systems like Windows Mobile, Google Android and Apple iOS (in that order) can claim only single-digit market shares, according to Ipsos Markinor research.
Microsoft is among the vultures circling the company's dying carcass.
Ivo Vegter, contributor, ITWeb
There are a few reasons so many people chose BlackBerry devices over its rivals, and it has nothing to do with whether or not those rivals are more powerful, more usable or more cool. One reason is the traditional strength of the device in corporates. It was easy to manage, and it was secure. For big businesses, a fleet of one-size-fits-all BlackBerry cellphones was a no-brainer.
But the biggest reason for the device's great popularity in South Africa is much simpler. Although BlackBerry devices use the exact same mobile data networks as every other handset, the data stream gets split at central servers on the operators' networks, to enable them to bill and manage BlackBerry data separately. This is necessary so they can offer the signature feature of RIM's handsets: BlackBerry Internet Service.
For a small, flat monthly fee, you can have all the data you want. While iPhone and Android users pay hundreds or even thousands of rand a month for data access, BlackBerry users pay a flat rate of only R60 or so to do all the Web browsing, read all the e-mail, and send all the instant messages they could want.
Operators crippled the service, of course, with unique terms of service that prevented the use of BlackBerry devices as data modems for computers, and limit bandwidth-hungry applications such as video. Despite this effort to push more demanding users towards more expensive devices, the cheap data was a massive advantage for BlackBerry, and operators have been engaged in a price war for even more restricted versions of the data plan.
The trouble is that BlackBerry Internet Service may well prove to be the biggest casualty of RIM's misfortunes. The devices and their software will no doubt survive, one way or another. RIM has a pretty decent patent portfolio (despite having lost a whopper of a patent suit in the US recently), and it has a massive installed base. If its much-delayed BlackBerry 10 release early next year turns out to be as good as the hype, a fire sale will likely attract some interest. It is already looking dirt cheap. Its share price has cratered to below $7, from 10 times as much only two years ago, and 20 times today's price as recently as 2008. Microsoft is among the vultures circling the company's dying carcass, and a Nokia-style bailout seems likely.
The relationship that RIM had with mobile operators, which forced the latter to offer the flat-rate data plan that BlackBerry originally became famous for, will no longer exist. Even in the unlikely event that RIM's reshuffled board manages to save the company as an independent, going concern, it will have no serious negotiating clout left. While price competition between operators in the domestic market will remain a factor in BlackBerry data plans, the contractual obligation to offer unlimited data for a single low, flat rate will be gone.
Already, local mobile operators have introduced capped or throttled data services for users who actually use their BlackBerry cellphones as intended. Expect the much-ballyhooed cheap offers of recent days to be crippled to the point of unusability, in an effort to force BlackBerry users onto the same rapacious data plans as everyone else.
The demise of the BlackBerry Internet Service as we know it today will be a body blow for mobile Internet access in South Africa. Millions of users, mostly in lower income groups, will no longer be able to afford their connectivity.
Operators will push plenty prevaricating PR about this. Some of it - for example, arguments about restrictive telecoms policies and Telkom's stranglehold on upstream bandwidth, which it uses to unfairly benefit its own mobile network - will be entirely true. Some of it - such as complaints that a few demanding users “abuse” flat-rate data plans - will be less convincing. The truth is, if operators had lost money on the BlackBerry Internet Service, they simply wouldn't have offered the device that required a flat-rate data plan solely on its manufacturer's insistence.
When those millions of low-income users get priced out of the mobile Internet access market, we would do well to remember what BlackBerry's dominant market position in South Africa taught us: selling inexpensive mobile bandwidth in a relatively poor country is perfectly possible.
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