A Land Where the BlackBerry Still Thrives

Research in Motion, the Waterloo, Ontario, company that makes BlackBerrys, has been hemorrhaging market share in North America. But a blog reader named Jon Markman, a  lawyer living in Washington, D.C., has discovered a land where the BlackBerry still dominates:

I wanted to send along an interesting thing I noticed on a recent trip to the Dominican Republic to visit my in-laws.

In the past when I’ve been there, I’ve noticed that everyone uses a BlackBerry; my wife and I were the only people I’d ever seen using anything else (other than a “dumb” phone, but those are pretty rare these days everywhere!). I figured it was only a matter of time; trends and technology seem to often lag a little when making it to the island. Given that BlackBerry has fading for years, I thought, soon it would fade there, too.

But this time, I noticed the same thing, despite tons of advertisements for Android phones on billboards around Santo Domingo (the capital). If anything, the number of BlackBerrys seemed to have increased, and I still saw no one with some other kind of smartphone. I mentioned this to my brother-in-law, and he had an interesting reason: in the D.R., unlimited texting is almost non-existent, whereas in the U.S. it has become commonplace. What this means is that BlackBerry’s competitive advantage in the instant-communications department (with their BlackBerry Messenger application) is significantly greater there than here; the odds are that you don’t have unlimited texting and your recipient doesn’t, so sending a text will cost you both money, whereas if you both have BlackBerrys, the BBM is free. It also creates a barrier to entry for a competitor; if everyone else has a BlackBerry, you’re going to get one, too, rather than hope that you can convince them all to download some kind of third-party instant messaging app that works with your phone, too. And, finally, it seems to me, it creates a cyclical effect; with BlackBerry so dominant, there doesn’t seem to be the same demand for unlimited texting, which means the carriers don’t offer them, leading to a reinforcement of the above.

For the record, I have no idea why unlimited texting plans are not common there (other than the cyclical point above); as far as I can tell, the network quality is the same as here (one of the main companies there, Claro, used to be a subsidiary of Verizon), and given the number of malls with expensive American and European brands, I can assure you that there are plenty of people with disposable income!

I tried to think of other examples where this kind of thing happens, but I couldn’t think of a good analogous situation. I thought it was very interesting and wanted to pass it along!

What do you all have to add?


C W WONG

Perfectly logical. Not just D. R many other countries doesn't have unlimited messaging. And the fact that iPhone too introduce iMessage in their iOS 5 speaks volume of such feature influence

Andreas Moser

I am absolutely fine with my "dumb phone". But I don't even answer that most of the time: http://andreasmoser.wordpress.com/2011/03/18/why-i-dont-answer-the-phone/

Mike Phillips

I have noticed the same circumstances with other "islands" of populations. As an educator of high school aged students, I notice how loyal teenagers are to RIM, BlackBerries and the BBM ability. Students form social networks and they can't afford (or their parents won't pay for) the unlimited texting packages of some carriers, so they are devoted (addicted) to BBMing and Blackberries. Changing to another smart phone becomes an issue since their social network is already using BBMs for free.

Botak

Blackberrys also dominate the mobile phone market in Indonesia (amongst middle class Indonesians that I know I would say about 85+% own 1). However, I don't think that unlimited SMS plans (which don't exist here either) would alter this as BBM offers more features (like group chat) that are very popular. Were they introduced, I doubt this would have much of an impact on Indonesians' instant messaging habits.

The physical keyboard on a BB is also an advantage for people here who find it almost impossible to go for more than about 15 seconds without sending some kind of message, be it BBM, twitter or FB

Whilst other smartphones are also used, people often have these in addition to the ubiquitous BB. People are frequently surprised that anyone who can afford one would not own a BB, and many Indonesians would not think twice about spending 1-2 months wages on the latest model.

Also, anyone in business who does not have a BBM 'pin' is certainly at a disadvantage in the networking stakes, and the prevelence of BBs is certainly a barrier to entry for competitors. Anyone lacking BBM will be excluded from a significant aspect of their friends communications.

As an example of the demand for BBs, a recent BB special offer turned nto a near riot with a number of casualties as people rushed to try to get a discounted phone.

http://www.thejakartaglobe.com/home/several-injured-at-indonesian-blackberry-launch/480816

the head of BB in indonesia is currently under investigation for this event.

http://www.thejakartaglobe.com/news/rim-indonesia-chief-named-a-suspect-after-blackberry-event-chaos/482576

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DP

Is there a market for used devices, which would be cheaper than purchasing a newer model? Enhanced functionality on a cheap device is an advantage over the $300-500 Android/iPhone market in the US.

Claudio Ibarra

Google Voice. Free SMS without paying for texts.

Mark

Google Voice isn't available anywhere but the US.

Jose X. Orellana

The reason is the extensive use of BBM capability to communicate internationally between Dominicans living in the island and their friends and relatives in the United States and Spain. Texting accross borders is more expensive than locally.

Jon M.

This is also definitely a factor; a country like the DR with a large number of ex-pats living abroad needs that kind of solution. But I still think it's interesting that, with the prevalence of instant messaging clients on Android and iPhone here, whether Google Talk, AIM, Skype, what have you, BlackBerry is still the dominant choice. My wife happens to have both a Blackberry and an iPhone, and I wonder if that's common for expats living in the US.

Meir

BB is also huge in South Africa due to high cellular data charges. Currently 500MB of data costs roughly 3 times the it costs for the unlimited BB plan.

Pierre-Louis

BB are cheaper than the iphone or Galaxy, and better than the similar-priced bad-smartphones...
so they are the best buy within a certain price range
unlimited texting matters less now that u can use "what's app"...

Bianca

Just sharing that BBs are predominant in Jamaica as well for the same reason - unlimited messaging. It is well known and acknowledged that the phones are typically inferior to other smartphones which are increasing their penetration. But for most people the deciding factor is BBM.

pryoslice

My first thought is that the reason for the lack for unlimited texting plans is the dearth of texting. That may seem counterintuitive, but it makes sense for a service such as texting.

I read an article in Time a while back that indicated that the marginal cost for a text message is nearly zero. However, there is a cost to maintain the infrastructure. Although that cost is not high, it’s not negligible.

In addition, individual demand for text messaging in an environment such as the one described for the Dominican Republic – it’s only needed when connecting to a relatively small percentage of your contacts – is highly variable. Some months you may use many text messages, some very few. Since consumers are often poor predictors of their future demand, especially in such situations (they are overly optimistic about their future ability to self-control their usage), they are not likely to pay much for an unlimited texting service they hope not to use. The same over-optimism leads them to not worry about the high marginal price of extra messages they expect to be able to avoid (I mean how many LOL's will I need to send? ... Oh, but it'd be rude of me not to reply to that smiley face...)

With this type of demand structure you expect consumers to agree to plans with a relatively cheap pre-paid text message plans and a high marginal price for extra messages. And since relatively few messages are sent anyway, to pay for that infrastructure, even cheaper package plans can't be that cheap and the extra message price is outrageous (as it used to be in US).

It becomes a self-reinforcing cycle, as long as other easily available outlets for texting (e.g. BBM) exist.

In US, for some reason, Blackberry use was growing for a while, but, maybe due to their business-oriented marketing here, they never achieved the consumer market penetration needed for BBM to take over a lion's share of messaging. Therefore, as messaging popularity grew to where every other grandmother does it, SMS quantity grew to the point where even a small average charge per message is enough for carriers to pay for infrastructure and make a profit.

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Dee

I travel to countries in Africa and I noticed the same thing. Everybody uses a blackberry device because it makes sense economically. BBM provides the unlimited texting (& voicenote capabilities) telcom service providers don't. Furthermore, to enjoy the full capabilities of an Android device, one should be on a 3G/ 4G network but most developing countries peak at 3G with EDGE being standard. RIM can lose market share in North America but I wouldn't be worried, there are lots of developing markets to tap into!

spike

The UK smartphone market has displayed similar behaviour to the US market. An interesting feature of the summer 2011 riots was that BB remained the phone of choice for the rioting/looting fraternity however. Apparently its because of its superior security features which make it harder for police to monitor activity

Craig

Many Blackberries in the DC area are paid for by the employer, who interconnects them to their email networks such that within-agency emails stay on internal servers (or perhaps transit over only 1 carrier's external server where the carrier is carefully chosen based partly on its promises of sufficient protections). Thus, the employers feel that the emails are more secure than they would be if they transited over a bunch of networks that are chosen by their employees.

Of course, the employers could choose to give everyone an Android phone and do the same thing, but these choices are made once every 3 to 5 years, which minimizes networking costs. I therefore expect that Blackberry's market share will dwindle in DC over the next 5 years.

kayolawale

the same phenomenon is what you have in many African countries. I'm the only one in a family of 4 who does not have a blackberry here in Nigeria.
with the bis service on blackberry, you have unlimited chat time and no cap on your internet download limit.

Rod

As a Canadian, where Blackberry still has a large market share, I have seen this phenomenon before. When I received my first blackberry six years ago I was hell bent on getting all my friends on Blackberry Messenger. After a couple of people joined everything snowballed and I literally remember almost all of my friends having Blackberries. For myself and my friends, having over 100 contacts in our BBM was not uncommon. However, as phones progressed and RIM was left behind by Android and Apple people began to switch to a better phone experience. I was one of the first to leave for Android and was lambasted for leaving Blackberry. In the two years since then I have seen almost all my friends abandon RIM. I was out on New Year's Eve and didn't see so much as one Blackberry amongst over 30 of my friends. 3 years ago I could have guaranteed this would have been 90% or more RIM products. One of my best friends finally jumped ship last month to an Android device and he noted that he had only one active contact on BBM after having over 95 contacts two years prior.

The point? BBM is an attractive feature, but not enough to turn the tide for RIM. As Apple and Android gain exposure in international markets where RIM dominates there is no reason to not expect the same shift in phone usage that North American and European markets have experienced.

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cackalacka

Physical keys also present a more viable option than touchscreens, when the ambient temperature is high. Body heat is tough to register when it's hot outside.

Walter

Agree with most comments here. I live in Mexico. I am not sure of BB market share, but at least in my circle of friends and co-workers it is 80% BB and the other 20% mostly Iphones. For us, Iphones are for playing and taking pictures, BB are for work. Also, answering or dialing an Iphoen while doing something else is really difficult!!