Shoeb K Zainuddin
Indonesians are in love with their mobile phones. Over the past five years, the use of such phones has more than tripled and nearly 200 million Indonesians today use cellular phones as their primary means of communications.
As part of this spurt in growth, smartphones have also come into their own in this market. Today approximately 20% of the cellular phone market is made up of smartphones as users look to expand the range of activities they can carry out on their cellular phones.
Recognizing this growing trend, smartphone providers such as Research in Motion, the maker of BlackBerry, is revisiting its strategy in Indonesia and other developing markets. BlackBerry’s success in Indonesia, says company official Hastings Singh, is due to the fact that Asians are much more social and prefer to communicate person-to-person.
In contrast, consumers in the Western world are much more consumption-driven. “Apple was very smart in developing a product around the consumption of media,” he notes. “What the iPhone eco system is not good at is building communities and helping people interact with family.”
This is what Blackberry hopes to capitalize on and further grow its presence in markets such as Indonesia, where it controls 52% of the smartphone market. “We are growing both in terms of our share and absolute numbers,” says Hastings.
The growth of smartphones, he adds, is being driven by two factors – the need of users to do more things with their cell phones, especially using them as a social platform; and the fact that smartphones are today the internet access devices of choice.
“More than one third of Indonesian internet users logged on for the first time over the past two years and the majority used smartphones in doing so,” says Hastings. This means that smartphone makers have to work harder to improve and enhance the user experience.
With this in mind, Blackberry will launch a new operating system later this year. Called the Blackberry 10, the system will be more powerful and, more importantly, it will allow smartphones to adapt themselves to the user’s needs.
“One of the things we are focusing on is how the Blackberry 10 can identify the user and adapt itself to his or her needs,” Hastings notes. “It will be able to figure out how the person likes to use the phone and as such, the experience of the user is critical.”
But even as it experiments with touch screens, Hastings adds that BlackBerry will never leave the keyboard behind. “We have been building keyboards for the past 12 years and every single key has a different shape. The engineering behind it has been very focused and that is a legacy that we will never leave behind.”
A world first
As smartphones encompass ever more features, affordability will become a major challenge for their makers. Today both the iPhone and the BlackBerry cost more than the average Indonesian can afford. To expand the market, either the cost of smartphones has to come down or more innovative ways have to be found to allow more Indonesians to own one.
“Affordability is the key to our strategy in Indonesia but we will not grow the market by discounting,” Hastings notes. “One of the things we are doing therefore is working with banks to offer unsecured financing for BlackBerrys without having to own a credit card.”
The company will shortly launch a national program with Adira Finance where buyers can but BlackBerrys on credit and pay in installments. “Indonesia is the first market in the world we are rolling something like this out and it’s great to do something interesting,” adds Hastings.
BlackBerry will offer the service through its chain of 45 retail stores around the country. Once a customer gets approval for financing, he or she can purchase a BlackBerry at any retail store that carries the product.
The company will also host a worldwide apps developer conference in Indonesia in July and expects more than 500 developers to attend. “This is a fast-growing industry and we have our global center for apps testing in Indonesia,” he notes.
As demand for smartphones picks up, new opportunities are opening up in Indonesia for young Indonesians who want to be involved in this new industry. BlackBerry is employing more Indonesian software engineers while venture capital firms are providing start-up funds for good ideas. The future for the industry looks promising and Indonesia could be at the cutting edge of a brave new world. GA