Will Research in Motion pick up pace in emerging telecom markets to avoid current turmoil?

All is not lost for Research in Motion (RIM), as emerging
markets is still a good bet for the struggling smart phone vendor.

RIM’s emerging markets revenue grew significantly from
$1.69 billion in fiscal year Q2 2011 to $2.33 billion in fiscal year Q2 2012
when other geographies saw negative growth in the same period.


The company retains loyal customers in emerging markets
like India, Indonesia, and the Middle East. Sales of RIM devices in
Africa, which is booming with mobile consumers, increased 741 per cent
year over year.


At present RIM is playing to its strengths in emerging
markets with features like BBM and BlackBerry email. BBM and BlackBerry email
will continue to do well as many emerging markets offer poor internet speed at
high prices.


For instance, smartphones are witnessing an increased
adoption in the India market. In the coming months the India smartphones market
is expected to become more crowded as more vendors, particularly those from
India and China, look to add these devices to their portfolio.


Smartphone shipments touched 7.9 million units in first
nine months of calendar year 2011. During the month of September alone
smartphones sales (unit shipments) crossed 1 million units, according to
CyberMedia Research.


Research In Motion (RIM) holds 12.7 percent market share
in smart phone segment. Samsung is leading the smart phone category with 39.7
percent market share, while Nokia has 34.7 percent share.


RIM is also focusing on Indonesia.


If RIM focuses on emerging markets, it will be able to
improve its market image and market share, according to analysts.


Recently, RIM is reported to have rejected an acquisition
offer by online retailer and budding tech giant Amazon.


According to media reports, Amazon hired an investment
bank to review the merger with RIM, but the process didn’t move ahead.
Microsoft and Nokia had also considered acquiring RIM, but their offers were
also rejected by RIM.


According to some RIM investors who declined to be named,
RIM’s board wants co-chief executives Mike Lazaridis and Jim Balsillie to focus
on trying to turn around the business through the launch of new phones, better
use of assets such as BlackBerry Messaging and restructuring.


Recently, Research In Motion faced stringent demands for
a change in its leadership. Jaguar Financial had called on two of RIM’s
independent directors to push for a separation of the roles of chairman and
chief executive.


Jaguar with other shareholders pushed for the replacement
of Mike Lazaridis and Jim Balsillie, who share both top roles. The two are
RIM’s largest shareholders and the most powerful figures in its management and
has been running the company since 1993.


Jaguar and other dissent shareholders had also asked the
BlackBerry maker to sell itself in whole or parts.”It strains credibility
to believe that a CEO requires the title of chairman to sell RIM products but
the RIM directors have apparently bought into this unconvincing rationale,”
said Jaguar, which had claimed support of investors that hold about 8 percent
of the stock.


Shareholders were unhappy because of the poor performance
of RIM. The market share of BlackBerry has been on a steady low. Its latest
Playbook has not been much successful and has been very weak in sales. RIM is
facing a hard competition from Apple’s iPhone and iPad, and devices powered by
Google’s Android system.


Amidst the hiccups, RIM’s revenue for the third quarter
of fiscal was $5.2 billion, up 24 percent from $4.2 billion in the previous
quarter. During the quarter, RIM shipped approximately 14.1 million smart
phones and almost 150,000 BlackBerry PlayBook tablets.


By Danish Khan
editor@telecomlead.com

 

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