Foglamp Overseas Insight: Q4 2011

Foglamp Insight

The future of Blackberry in Emerging and Frontier Markets

Despite many analysts writing off Research in Motion (TSE:RIM)and its Blackberry smartphones as “basically dead in the US and Europe,” [1] the company remains optimistic that its devices will continue to do well given RIM’s ability to capture and maintain its position in emerging markets overseas.Since we work regularly in those geographies, we were curious to test our hunch that RIM might be overstating its ability to survive in its current form by simply selling more and more cheap handsets in emerging and frontier markets. So we asked a number of our field contributors in several disparate markets around the world to have some quick-and-dirty conversations with consumers to get a sense of their preferences for mobile devices.  The highlights of their conversations with 1,500 respondents from six countries — three in Africa (Kenya, Nigeria, and South Africa) and three in Asia (China, India, and Thailand) — are below.

What mobile phones are people using in Africa and Asia?  What phones do they want to use and/or plan to purchase and why?

Foglamp field contributors took to the streets with a short questionnaire asking those questions of consumers in their home markets. Not intended to be a statistically significant sample, our conversations with consumers were instead a rapid one-week dipstick approach to better understand how cost, satisfaction levels, and features played into their current and future choices of mobile devices. Full results can be downloaded here as a spreadsheet.Unsurprisingly, smart phone usage varied across the countries, with Nigerian and South African consumers being the more frequent users of Blackberry devices. Thai consumers seem to enjoy their iPhones, with the Chinese consumers being Android fans (certainly a good sign for Samsung (SEO:005930), HTC (TPE:2498), Huawei, LG (NYSE:LG), and other major Android handset manufacturers). If nothing else, these findings are a helpful reminder that “emerging markets” are not a monolithic black box of preferences; they instead represent radically different countries with different prospects and consumer trends.What might be more interesting is which phones consumers aren’t using in these markets. In our conversations, Apple’s(NASDAQ:AAPL) iPhone was the only smart phone to register a sizeable presence (in terms of current usage) across all markets. Blackberry’s presence in China was negligible, at least in our quick exchanges.When asked about what phone they planned to purchase next, the results tracked with the current choice of phone. Conversations with consumers did not suggest a mass exodus from consumers’ current platforms. A modest exception was in India, where respondents often identified Blackberry as the next preferred phone.

Wither Blackberry? Our results, while again not statistically significant, do raise interesting questions about RIM’s future in emerging and frontier markets that deserve deeper research and surveying. Certainly RIM has a presence in a number of large and growing emerging markets. And the company is unlikely to see a massive drop in its user base in those countries in the short-term. Even after removing cost as a factor for next phone considerations, consumers in half the countries preferred Blackberry the most. But we also saw no noticeable fervor for Blackberry devices. On the whole, iPhone remains quite a bit more popular than Blackberry when discounting cost as a consideration.  For those consumers that preferred iPhone, superior aesthetics, ease of use, and variety of features/apps were commonly cited reasons. As cheaper and more feature-rich Android devices flood these markets in the coming years, and as rumors of an iPhone Nano or other low-end iPhone continue to swirl, the question remains: can RIM actually grow its market share in emerging markets to offset major losses in North America and Europe? The company’s future might depend on it.

[1] http://articles.businessinsider.com/2011-03-16/tech/30006699_1_markets-playbook-tablet-rim

New Foglamp Service: Market Chatter

The release of these results marks the launch of a new service from Foglamp: Market Chatter.  In line with our mission to provide clients with on-demand, customizable in-country research, Market Chatter helps investors, consultants and managers test their hunches through affordable, rapid exchanges with market participants in more than 120 emerging and frontier markets. Client requests for Market Chatter can typically be launched within 48 – 72 hours at a fraction of the cost of traditional market research in more than 100 markets simultaneously. Through rapid-fire man-on-the-street conversations, our field contributors can provide clients with real-time insight into market trends and consumer preferences. While not designed to yield statistically significant results, we have found increased demand from clients for this type of rapid primary data collection that is helpful for testing out investment theses and “scratching an itch.”

Contributor Profile: Our Teams on the Ground

Foglamp has seen an increased demand for information in and about China, and our growing roster of Chinese contributors is always available to assist clients across a broad spectrum of projects.  This Foglamp contributor is an independent consultant with a Masters in Journalism from the University of British Columbia.  She has worked as a news researcher, a market research analyst, and a broadcast journalist internationally and in China.  She travels extensively for us on assignments from her home base in Beijing and has contacts in numerous industries that she reaches out to as requested.

Foglamp is a customizable in-country research service providing clients with access to a network of on-the-ground information miners in more than 120 countries.  Most of our research is provided in the form of short memos; by reaching out to a range of market participants, clients are able to glean insights from dozens of local managers rather than just one or two industry experts. Our network of field contributors can be used for due diligence work, market scanning, and other in-country research activities to help clients in geographies where resources are difficult to find. Please see our website at www.foglamp.org for more information and contact us (info@foglamp.org) to schedule a follow-up conversation.