Oh RIM, once a great company with a great business. I guess this is what happens when you can’t keep up with competitors and stopped innovating on a regular basis. Looking at the trend, there’s a big chance that RIM’s own “partners” are trying to move away from them. Sounds crazy? Maybe not.
Just a few months ago, an interesting move taken by one of the telco company in Indonesia intrigued me. Telkomsel, one of the biggest carriers in Indonesia decided to promote not just one, but three messenger apps: WhatsApp, KakaoTalk and Line. I can’t help to consider the (not so) crazy idea that this is a move to keep consumer away from Blackberry, those apps are unarguably competing with Blackberry’s BBM messenger platform, which is arguably the sole factor that keeps Blackberry alive.
According to our sources that prefer to stay anonymous, RIM and telco companies are currently having a love-hate relationship, actually it’s more hate than love. RIM considers carriers as its vendors, not partners. This can be seen by the marketing programs for BlackBerry devices by telcos that have to pass certain sales KPI (key performance indicator) set by RIM that is not exactly making telco companies excited.
Another “hate factor” is that RIM prefers to separate carriers from devices sales and distribution scheme. In many cases this leaves telco companies high and dry; it has the money to spend on promotion but no control of the products available for sale. RIM’s decision to separate marketing from sales is one of the pain points for telco companies in working with RIM.
As you probably know, the way RIM makes money is from its BlackBerry Internet Service where consumers pay data packages provided by carriers. Carriers will take a small margin from this revenue and the rest goes to RIM. For telcos, promoting apps like WhatsApp, Line, and KakaoTalk has a better proposition because supposedly the revenue sharing scheme is more generous. According to our sources, RIM is kind of ignorant about this huge cost paid by telco companies.
This, our source added, is probably the reason why RIM decided to postpone BB10 launch in North America. US carriers demanded to negotiate with RIM in order to reduce the service cost provided by RIM because it costs carriers a lot of their profits. But apparently, things aren’t going as rough with Indonesian telcos.
Dolly Surya Wisaka, XL Axiata’s head of business innovations told us that things aren’t as disruptive as it seems, “BlackBerry users is still growing, although not as fast as it used to be. More volume means the price can go even lower”. Wisaka also notes that RIM still has unexplored potential market in Indonesia, 2nd and 3rd tier cities which are starting to move on from their feature phone to a BlackBerry. “This can go on for another two to three years”, said Wisaka.
For now in Indonesia, because the growth is still there, RIM still has bargaining power against local telco companies. In other countries, RIM would have to bow down to telcos and regulators just to keep its head above water. How long would you think before telco companies start to imitate the actions taken by US telcos? Is 2-3 years enough for RIM?
