BlackBerry sales fall by over 50% in India

Times of India 

BlackBerry sales in India have more than halved so far this year, with consumers largely shying away from the Canadian firm's new handsets running on the BB10 platform, mirroring the rapid decline in the worldwide fortunes of the once-dominant smartphone maker. 

As per estimates by the country's two largest cellphone retailers, The Mobile Store and UniverCell Telecom - the two together account for more than half of total smartphone sales through modern retail stores - sales of BlackBerry devices have declined by more than 50% year-on-year so far this year mainly due to the poor sale of BB10 devices such as the Z10, Q10 and Q5. 

"The BB10 devices have not gained traction the way BlackBerry had anticipated they would in India," Himanshu Chakrawarti, chief executive at the country's largest smartphone retailer, The Mobile Store, says. "BlackBerry sales are losing ground rapidly to Android devices from Samsung and Sony, and Apple's iPhone," he adds. 

According to market tracker IDC India, BlackBerry's share in the Indian smartphone market dropped to 2% in the April-June quarter from 7% a year earlier, while overall smartphone sales are growing over 50% annually. Latest data available from home-grown market tracker CMR shows BlackBerry's market share slipped to 0.7% in July, down from 7.1% a year earlier. 

IDC India senior market analyst Manasi Yadav says BlackBerry's pricing strategy in a market like India is not very clear, while Tarun Pathak, analyst (telecom practice) at CMR, says BlackBerry's strategy of launching just three BB10 devices has not paid off since competitors have multiple models at various price points. 

Retailers have started reducing BlackBerry inventory in their stores. Satish Babu, founder and MD at UniverCell Telecom, says his firm has trimmed down the inventory position of BlackBerry devices in his stores due to poor sales. 

Some retailers say BlackBerry has also started to reduce the number of in-store sales executives and promoters across the country with several of the franchisee-led exclusive stores also downing shutters. 

An ex-BlackBerry India executive, who was well versed with the company's plans till a few months back, said India was one of the few markets where the brand was still growing in the last two years - a period when it was losing stand globally. "But now, it looks like an uphill task to revive in India, which can potentially impact the company's valuation," he said, requesting anonymity. 

Late last week, BlackBerry said it would post an operating loss of $950-995 million for the June to August period, due mainly to huge unsold inventory of BB10 devices, particularly the Z10, and its revenue would slump about 45% to $1.6 billion from a year earlier. It also announced plans to cut 4,500 jobs worldwide and said it's exploring strategic alternatives, including a sale. 

A senior telecom industry executive, who was closely associated with BlackBerry's Indian arm till recently, says its India headcount may drop from 55-60 at present to roughly 40 in the near future under the global job cut plans. The company's direct India headcount was about 70 six months ago. Key divisions likely to see further job losses could be sales, marketing and after-sales services, the executive adds. 

Globally, BlackBerry sales have been battered with Windows phone that powers Nokia smartphones inching ahead as the third largest smartphone operating system in January-June this year, even as Google's Android and Apple's iOS lead by a wide margin as the top two players. 

"BlackBerry OS share will decline markedly...due to tepid BlackBerry 10 reception and emboldened competition that are expected to whittle away share in its remaining regional bastions of strength, such as Africa, Latin America, and the Middle East," IDC said recently in its global mobile phone tracker. 

The Canadian firm, in an emailed response to a query from ET, appeared to deny a Wall Street Journal report that said BlackBerry would stop selling to consumers. The company said it will refocus on enterprise and the prosumer market, which is a cross-over of enterprise, professional and consumer users. It, however, declined to comment on other ET queries. 

Meanwhile, retailers say while BlackBerry is losing ground, Nokia - which, too, has lost its stranglehold in the Indian market - hasn't seen much of a dip in sales since the announcement of Microsoft buying its devices business nearly three weeks ago as customers appeared not to be bothered about the change in ownership, and bought the cheaper feature phones. 

(With inputs from Kalyan Parbat in Kolkata and Romit Guha in New Delhi)