BlackBerry cuts the BIS

With its newly launched mobile operating system and its accompanying devices, BlackBerry wants to woo the top end of the smartphone market. But does this make sense for emerging markets, especially given the new platform doesn’t support low-cost all-you-can-eat data? By Craig Wilson.

The BlackBerry Z10

The BlackBerry Z10

BlackBerry’s new devices are too data intensive to use the company’s flat rate — and heavily compressed — BlackBerry Internet Service (BIS), provoking concern from South African BlackBerry lovers that it will be much more expensive to use the company’s new smartphones.

Combine the need to pay for data according to usage with the fact that the new devices — at least the early ones — are likely to cost the same as other top-end smartphones, the question arises: has BlackBerry, which was known as Research in Motion until this week, created a viable upgrade path for users in emerging markets like South Africa?

On Wednesday, the Canadian company announced two new handsets running the long-delayed BlackBerry 10 (BB10) operating system. Though South African pricing hasn’t been released, the first, the Z10, looks set to cost in the region of rivals such as the iPhone 5, the Samsung Galaxy S3 and the Nokia Lumia 920.

The Z10 is evidently aimed at high-end consumers rather than the bulk of BlackBerry’s existing user base. The second of the phones, the Q10, will only go on sale in April.

Technology consultant Liron Segev says he’s not at all surprised that BlackBerry has decided to aim high with the Z10 because its existing devices haven’t been able to match the best devices from its rivals, which has seen some users defect as a result.

Segev says the Z10 is positioned to appeal to those who want the functionality and applications offered by other high-end devices, alongside having the popular BlackBerry Messenger service.

For these users, the lack of BIS is unlikely to be a problem, he argues. “If you’re a high-end user, you’re probably paying for a data bundle already. It’s very smart of BlackBerry to launch to the high end because pitching only to the low-end would look like giving up.”

BlackBerry has been vocal about its efforts to ensure a healthy selection of applications and content for BB10 users, including paying developers US$100 to port existing apps to the platform. Segev says this demonstrates the company’s desire to be taken seriously, and that it’s learnt its lesson with the PlayBook, its tablet computer that failed to win favour with consumers.

“The PlayBook died because of a lack of apps, among other things,” Segev says. “The hardware was superb, but the software wasn’t. Hence the delays in releasing BB10; BlackBerry couldn’t make the mistake of launching a half-cooked product again. To win back the customers it’s lost, it had to get it right out of the box.”

Segev says BlackBerry made the right moves at the launch, but feels it left too many questions unanswered, particularly around pricing and device availability. In addition, the company should have spoken more about its other BB10 device, the Qwerty and touch hybrid handset, the Q10, he feels.

“BlackBerry should’ve told South African customers when they can get the Z10 and for how much. Now people have to wait. The uncertainty is what’s always been BB’s problem. I’ve got an upgrade due now, do I wait or do I get something else? There are going to be lots of other people asking the same question.”

Although the Z10 is a new device for BlackBerry in terms of styling, the Q10 looks like its earlier products. “The Q10 looks familiar, it’s a device existing users can relate to. People wanted to know about it.”

No BIS
Neither the Z10 nor the Q10 will support BIS because they’re too data intensive, and that could be the real obstacle for attracting lower-end users like those in India and South Africa.

However, World Wide Worx MD Arthur Goldstuck says those who suggest that without BIS BlackBerry is as good as dead are missing a number of subtleties of the company’s proposition.

“We’re actually currently doing research to test potential uptake of the phones before and after the launch,” Goldstuck says.

“We’ve done the ‘before’, now we’re working on the ‘after’ among feature phone users here and in Nigeria.” South Africa and Nigeria are BlackBerry’s two largest African markets.

Arthur Goldstuck

Arthur Goldstuck

“Initial indications suggest there is a huge appetite for current and new BlackBerry devices among feature phone users. The brand momentum for BlackBerry is still strong.”

Goldstuck says what made BIS possible was that all data was compressed and flowed over BlackBerry’s own network. “But that meant poorer browsing performance than on any other smartphone. Now you enter this new data-intensive ecosystem and it’s not feasible to run it through the same security and compression.”

This means BB10 devices lend themselves to a data-bundle model where other brands play. However, Goldstuck says the text component of the revised BBM application will still run over the existing BIS architecture, meaning operators may sell a data bundle with BBM as a value-add at no cost.

“That is the one element that makes BIS so attractive — that unlimited BBM chat. It’s a pretty low-cost service if you think about it. Alternatively, when you get a data bundle, the operator could allocate R15 of it to BBM.”

According to Goldstuck, it’s quite likely that by the time the enthusiasm for the low-end devices begins to wane, the low-end of the market will have BB10 devices catering to it.

Unique interface
BlackBerry has been adamant that one of its key goals with BB10 is to offer a unique user experience. Adam Leach, principal analyst at Ovum, thinks it’s succeeded on that front.

“The BB10 platform offers a differentiated user experience in today’s crowded and homogenous smartphone market. The Blackberry Z10 and Q10 will stand out from the Android masses and look distinct from Apple’s iPhone.”

Leach says the BB10 user experience introduces “some nice new features” while building on the company’s user interface heritage, which should make it appealing to existing BlackBerry users. “However, the challenge for the company will be to attract new users and those that have already moved to alternative smartphones,” he says.

“BlackBerry has rightly focused on ensuring that the BB10 devices have a large catalogue of content and applications which is now essential for any modern smartphone, and achieving 70 000 applications at the launch of a new platform is good start.”

But Leach says that despite BB10 being a well-designed platform which will attract short-term interest from existing users, the company will “struggle to appeal to a wider audience and in the long-term will become a niche player in the smartphone market”.  — (c) 2013 NewsCentral Media

Related Posts Plugin for WordPress, Blogger...

Share this article

  • http://twitter.com/meistronomic Gerhard Burmeister

    Blackberry can explain as much as they want,without BIS it,s goodbye for BB10 in South Africa,mark my words…!

  • Dimitar Dimitrov

    I love it that it won’t have BIS. I have an unlimited data plan and i am sick of my BB Bold 9780 still not letting me use my FB app, The App World and all sort of stuff. BBM is so un needed with programs like Viber and Whatsapp. I was just about to quit on Blackberry but now i have faith and can’t wait to get my hands on that gorgeous Q10. It’s amazing and i hope i can see it around stores in my country soon.
    P.S. I am from Bulgaria

  • Tim

    Define niche? 15%? That would be very profitable for a company that size.

  • http://www.facebook.com/profile.php?id=1111170713 Thabiso Makelo

    Bye Bye Blackberry ! It was nice knowing you ! Companies were using you because of the data compression ratio on BIS with makes you cheap. They were trying to “SAVE” If they don’t save, see how long they going to stick with you.

  • http://www.InTheCube.co.za/ InTheCube.co.za

    Finally, a high-end Blackberry device without the crippling BIS crap. I say good riddance. This makes the Z10 and BB10 platform viable for a whole lot of high-end users not afraid to spend on data bundles. I might just decide to give BB10 a try. Though I have to admit I am pretty invested in Android with all my app purchases over the last 3 years. It’s gonna suck to have to fork out again for apps.

  • Chenara Fenton

    Not sure that this is a good idea for the South African market – BB has never had to compete with high-end smart phones before because it was filling a different gap in the market. I informally polled all my BB-using friends and the overwhelming consensus was that they would not choose BB without BIS.

  • Greg Mahlknecht

    Globally, they’re around 5% now – it would surprise me greatly if they came through the transition with anywhere near 25-30% of that figure of BB10 devices. We can look at Nokia’s Symbian->WP transition for a very similar transition. So in the next 2-3 years, I’d say that they’d be lucky to get 2%-3% of the global market with BB10.

    A big problem here is that, while BB7 is still out there, we won’t have accurate BB10 stats for over a year as they’ll be lumped in together. I’m sure that Blackberry is working feverishly to wind down the unprofitable BB7 part of their business, it’s an albatross around their neck at this point.

  • http://www.facebook.com/grahamandsherry Graham Seaton

    MTN have a MTN BlackBerry® Social and Email Plan which includes BlackBerry® Messenger (BBM™), BlackBerry® Email, Browser, BlackBerry® App World™, Social Networking and 1 Web-based Email Account with a limit of 25MB, which is more than adequate for us normal users (out of bundle data is R1.00 PER MB), all for R25.95 per month. I believe the other operators offer something similar. Surely this could be offered for BB10 users, and thus retain the BIS function. The more hungry data users can do the heavy stuff near a wireless router via WIFI. So what is the problem?

  • NMo9

    My understanding of this situation is that BIS for BB10 will not be “unlimited” like it is with BB7 & older devices.. Most of the BB services like BBM(and apps which use BBM) will still run through BIS while the other internet related services like Web & streaming won’t be through BIS but through the normal APN.

    Am I right or I misunderstood??

  • Greg Mahlknecht

    I checked that out on the MTN – what a horrible horrible plan. The 25meg applies to ALL the blackberry services, including app world, BBM, etc. On every network you seem to be able to get data cheaper than R1/meg.

    It should also be noted that the bundle’s price is R29.95 – which is more than R1/meg – this is the first time I’ve ever seen in-bundle prices more than out-of-bundle prices.

    So basically, you can get a better package than that for ANY smartphone on ANY network. MTN are charging you a premium to get the BIS services you’d expect to get for free/at a discount.

  • Michele R

    When I upgrade my Bold in 2 years time (I am a high end user that saves on cost,like most people!) I might as well get a Samsung Galaxy with WhatsApp if BIS is going to be discontinued.BIS is the reason why I am a loyal BB customer

  • http://www.facebook.com/karin.kapp Karin Kapp

    WHEN CAN WE UPGRADE TO BLACKBERRY Z10 IN SOUTH AFRICA ANDWERE IN PORT ELIZABETH AND UITENHAGE.

  • http://www.facebook.com/fortune.legoabe Fortune Legoabe

    i am definitely switching contracts, clearly blackberry missed this one, they should have insisted to offer BIS. the cellphone operators clearly want to make more money selling expensive data. im a high end user but i am all about saving costs!

  • anver

    So this phone is like any other non blackberry phone? Blackberry were becoming famous for its BIS and now u have to pay as you use? Too bad. I’ll stick woth my blackberry Torch 9810i thnks.

  • http://www.facebook.com/robynalexis.ward Robyn Alexis Ward

    i don’t think that anyone would want their BB anymore if there is no BIS. We could stick to a Nokia or iPhone. terribly disappointed:-(

  • Hein

    No bis in south africa = no more blackberry

  • http://www.facebook.com/jcat24 John Anthony

    Well Blackberry you have ignored the people that buy your phones for the BIS because it was economical and I am loyal to the blackberry brand but obviously without BIS I will not continue to be , my next phone will not be a blackberry , blackberry has ignored their niche Market (the people who love BIS) , now you will lose a lot of this market because why must people hang around while you bring your Z10 or Q10 up to Samsung or Apple quality level when you have taken the benefit of BIS away , you have lost/given up the edge you had and setup the blackberry company for failure. I would have been supporting blackberry forever but I’m sorry this is a deal breaker. Good bye

  • http://www.facebook.com/jcat24 John Anthony

    Well Blackberry you have ignored the people that buy your phones for the BIS because it was economical and I am loyal to the blackberry brand but obviously without BIS I will not continue to be , my next phone will not be a blackberry , blackberry has ignored their niche Market (the people who love BIS) , now you will lose a lot of this market because why must people hang around while you bring your Z10 or Q10 up to Samsung or Apple quality level when you have taken the benefit of BIS away , you have lost/given up the edge you had and setup the blackberry company for failure. I would have been supporting blackberry forever but I’m sorry this is a deal breaker. Good bye
    Anyway whatsapp is cheap (R8 a year)

  • http://www.facebook.com/longile.bongani Longile Bongani

    Reality is Blackberry nowadays rely heavily on the low end market, who they have just announced they are unceremoniously dumping. Their tactic may have worked, if they were popular in bigger markets, but in South Africa where data is more than 10 times more expensive than EU and US etc, the amount of people who really don’t care about BIS is veery very limited. They are undoubtedly going to lose most of their currwnt loyal customers. Whether they can survive that knock and then try to enter the apple, android space is a very very long shot. They will have to keep supplying the BIS market through their BB7 etc for a long while yet

  • Zodidi Nteyi

    Any banking apps compatible with the BBz10? I heard there weren’t as yet!

  • Vusani

    Bye Bye Blackberry, What does high end mean? I have a great job i make good money but BIS saves me a lot of time buying bundles and so forth so If there’s no more BIS i am getting the iphone5 or Galaxy

  • http://www.facebook.com/Lilia.FruitRhymes Lilia Ashiqa

    What a sad news about BIS! I’ve been loyal to blackberries for years, mostly because of BIS. Was quite excited about bb I z10, especially about skype feature. Was going to get a contract .. but when I read about date and about experience of others (2-4 gb a month without being very heavy user!) – it put me off, indeed. In some USA forums I read that there are some of their providers offer unlimited date usage, so will hope and wait till some of SA companies will offer the same to us!

  • Cecilia

    I’m guessing BIS for BB7 is creating losses for BlackBerry. No point of selling something if it creates losses, they are better off losing BB7 customers than having bigger losses maintaining them. Unless maintaining BIS does have benefits for BlackBerry, which doesn’t seem to be at the moment. After all, iphone or android also don’t have BIS, they can’t afford sacrificing themselves for BIS so they are trying to make BB10 comparable to android or iphone in terms of user experience while also giving BES option for enterprise customers. I think it’s a good strategy to get back to profitability

  • leonard Lebere

    I personally never liked it from the start! This BB10 dose not even look like a BB… What happedned to the tradional BB Scroler… Why does the built of the device look like an iPohne? Why is the camera like and iPhone? Most important… Why apps like samsung?
    BB is going down… #i dont mind donating 50 rand for a decent funeral… After a year Adulf(CEO of BB) Wont even afford a roll of Buns!

  • http://www.Something.Something.Darkside/ Loki Fenrir

    Due April, blackberry made official statements. lovely device

  • http://www.Something.Something.Darkside/ Loki Fenrir

    40%+ off all Android devices currently are, Samsung and it has pretty much the largest market share currently, however they are letting out more and more about going Tizen (their own linux based OS). Which can and maybe are already running on their smart TV’s and other smart devices, makes logical and business sense. Integrability , Shared cross-device services …. a future of wonder!
    my future view of the mobile market shares, taking into account all the lawsuits and patent-right violations etc etc etc, in 3years time is as follows:
    Android 30%
    Tizen 20%
    Windows Mobile 14%
    BB (BB&BB10) 15%
    iOS 5%
    *wildcard-newbee 10%
    others 6%

  • http://www.Something.Something.Darkside/ Loki Fenrir

    who? Thorsten Heins. is the CEO. don’t see that much similarity to the iPhone though? iPhone devices are only “designed and marketed by Apple Inc”, Apple doesn’t manufacture their own devices… As for the icon thing… It is a good design concept to standardize as it creates a sense of security and comfort for the end-user regarding usability and , its always been that way, maybe add a sparkle here or a dash of colour there, but that’s how it is. imagine if road signs were all differently designed, nobody would be able to use or obey the road, same concept. as for hardware… All Companies buy hardware from Manufacturers, modify it a bit, tweak it a bit and then assemble it in their product, many share the same manufacturers…

  • http://www.Something.Something.Darkside/ Loki Fenrir

    mobile data is insanely expensive hey… i see the bb move more of a kick in the teeth towards apple , google and windows mobile, and then later comfort the loyal users with the q10 and devices more similar to what they’re used to.
    each to their own perception i guess..

  • http://www.Something.Something.Darkside/ Loki Fenrir

    “Markets always Stabilizes , Tomorrow everybody is going to see just how insidious Personalization is, infringing on privacy and controlling what they the proprietors think people should see rather than what they want to see. Enclosing everyone in a bubble of ignorant bliss. What then?”

    “Would that cause Google , Yahoo , Facebook , Twitter , YouTube to close? No.
    Loose a few dollars? Definitely.”

    “Just smile and wave, welcome blackberry’s changes, they still have a few things that’s going to rock the industry. The industry itself is changing, Blackberry just got back on-board with it.”

    Or chicken out. your choice.

    “The only Constant, is Change.”

  • http://www.Something.Something.Darkside/ Loki Fenrir

    I Dare you to try any OS10 device…

  • http://www.Something.Something.Darkside/ Loki Fenrir

    since january 25th z10 has been available in SA, and the q10 is due April 2013. awesome handsets, already have my z10… even better than the beta virtual OS i tested last year…..

  • http://www.Something.Something.Darkside/ Loki Fenrir

    worried about that? microsoft changed their software licensing, if you now buy office and some other software they allow you to “Port” and install it to as many as 5 devices with a single license… thats realy a bold statement and a very good movement from microsoft. i got my bb and more than happy with it. if i had to get another device it would probibly be another 10 bb device… otherwise a windows mobile. integration is key. and neither apple nor google seems to understand that concept.

  • http://www.facebook.com/mark.l.jacobs Mark Luke Jacobs

    Not a smart move RIM, not a smart move at all. I too am a high end user, and i was really looking forward to the Z10, now, well i am not even interested in the least. How do you go from offering a service, to taking it away so promptly? i will put it to you this way, we are not stupid or thick in SA, i am convinced that “our” service providers have had something to do with this, i am convinced, all they ever think about it themselves and their investors. We as users are just as much investors as the actual business owners. so go ahead, do what you propose to do, you are actually telling us not to buy any RIM products. you will lose what has taken you so long to build up in SA and other countries. we are your market, why the heck do you not ask for our input? i have never seen any market research for the Z10. my advice is, fix it, and fix it fast, include BIS and make the Blackberry followers come back, mark my words, they are laready leaving.

Why TechCentral?

We know that as a prospective advertiser, you are spoilt for choice. Our job is to demonstrate why TechCentral delivers the best return for your advertising spend.

TechCentral is South Africa’s online technology news leader. We don’t say that lightly. We believe we produce the country’s best and most insightful online tech news aimed at industry professionals and those interested in the fast-changing world of technology.

We provide news, reviews and comment, without fear or favour, that is of direct relevance to our fast-expanding audience. Proportionately, we provide the largest local audience of all technology-focused online publishers.

We do not constantly regurgitate press releases to draw in search engine traffic — we believe websites that do so are doing their readers and advertisers a disservice. Nor do we sell “editorial features”, offer advertising “press offices” or rely on online bulletin-board forums of questionable value to advertisers to bolster our traffic.

TechCentral, which is edited and written by award-winning South African journalists, cares about delivering top-quality content to draw in the business and consumer readers that are of most interest to technology advertisers.

We’d like the opportunity to demonstrate the value of directing a portion of your advertising budget to TechCentral, whether your company is in the technology field or not. Numerous opportunities exist for companies interested in reaching our audience of key decision-makers in South Africa’s dynamic information and communications technology sector. We offer packages that will deliver among the best returns on investment available in the online technology news space.

For more information about advertising opportunities, and how your organisation can benefit by publicising itself on TechCentral, please call us on 011-792-0449 during office hours. Or send us an e-mail and ask for our latest rate card and brochure.