TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      E.tv: ‘We know we must vacate broadband spectrum bands’

      29 June 2022

      E-commerce is killing shopping malls – but, curiously, not in South Africa

      29 June 2022

      Eskom warns recovery from strike chaos could take weeks

      29 June 2022

      Eskom offers workers 7% increase: sources

      29 June 2022

      Eskom employees returning to work

      29 June 2022
    • World

      Napster plots crypto comeback

      29 June 2022

      Pictures: Chinese spacecraft acquires images of entire planet of Mars

      29 June 2022

      Arm aims for leg-up in smartphone games with new chip tech

      29 June 2022

      Warnings of a final bitcoin ‘washout’

      29 June 2022

      Sony launches into PC gaming hardware

      29 June 2022
    • In-depth

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022

      Sheryl Sandberg’s ad empire leaves a complicated legacy

      2 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Opinion»Alistair Fairweather»The desperate struggle for third place

    The desperate struggle for third place

    Alistair Fairweather By Alistair Fairweather20 May 2013
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Alistair Fairweather
    Alistair Fairweather

    Few people remember third place. Whether in sport, science or business, there’s little glory attached to the bronze medal. But two multinational giants, BlackBerry and Microsoft, are straining to be the third player in the burgeoning smartphone market.

    The latest figures from IDC, an industry analyst, show a rapidly expanding global market for this new generation of mobile phones. Over 216m handsets were shipped during the first three months of 2013, an increase of over 40% compared to the same period in 2012.

    But the lion’s share of that market — over 92% — is flowing to the two dominant platforms: Android (owned by Google and licensed to manufacturers such as Samsung) and iOS (owned by Apple). Between them, Microsoft and BlackBerry scrape together just over 6%, down from 8,4% in the first quarter of 2012.

    This aggregate figure obscures important details. In quarter one of 2012, BlackBerry (formerly Research in Motion) sold nearly 10m phones. In the same quarter this year, it shipped only 6,3m units. Microsoft’s device partners, on the other hand, shipped 7m phones — more than double their total from the first quarter of 2012. That puts Microsoft in third place for the first time in nearly three years.

    These numbers suggest some important industry trends.

    Microsoft’s Windows Phone 8 operating system is finally starting to gain traction, reversing years of steady decline in the mobile market for the software giant. It’s unclear whether Nokia, Microsoft’s biggest device partner, is seeing any growth in its smartphone business, but increased demand for Windows 8-powered phones can only be good for the beleaguered Finnish manufacturer.

    The much trumpeted launch of BlackBerry’s new line of phones, powered by the BlackBerry 10 operating system, has yet to produce any positive results. To be fair, its newest handsets only reached most consumer markets in March or April so it’s too early to see any real effects.

    But two key decisions are likely to make the going even tougher for the Canadian smartphone giant. The first is its decision to exclude BlackBerry Internet Services (BIS) from BB10.

    Initially conceived as a way to shield business customers from industrial espionage, BIS evolved into a mechanism for offering flat-rate, “all you can eat” data services. In bandwidth-poor countries such as South Africa, this proved a huge hit for BlackBerry, attracting millions of customers who wanted the freedom of unlimited e-mail and browsing without the fear of high data costs.

    This business model always had a limited shelf life. Bandwidth prices are plummeting in most countries, making BIS less attractive to many consumers. And like any unmetered service, BIS has always been rather slow, patchy and prone to abuse. Last year, Vodacom discovered a local teenager who figured out how to download hundreds of gigabytes of data a month via the service.

    Arthur Goldstuck, a local technology analyst, believes that the loss of BIS is not as deadly as it might first appear. In a recent interview he said that “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.”

    What I think Goldstuck fails to appreciate is that BIS is an emotional proposition, not a logical one. When I talk to BlackBerry customers about the end of BIS, the reaction I see is naked fear, not rational disappointment. Horror stories of people leaving the BIS fold only to be hit with enormous bills for data are a standard trope among BlackBerry loyalists. These customers feel betrayed and abandoned by the brand.

    So why cut BIS? Simple: the company has realised that it can’t offer the same quality of service on BIS that open, metered networks can. By baking BIS into its next generation of phones, BlackBerry would have crippled its beautiful new handsets. It was a difficult sacrifice for the company, but a necessary one. It’s not yet clear whether customers will see it that way.

    The second decision that will make the fight harder is the opening of the BlackBerry Messenger service (BBM) to users on the other major platforms starting with iOS and Android. BlackBerry assumes that this move will make the BBM network more useful to current customers, and encourage them to stay loyal to the brand.

    In reality, the opposite is just as likely to happen: many frustrated BlackBerry customers are staying only because the private BBM network they have built up over years is so intrinsically valuable to them. Now they have a way to leave BlackBerry without losing access to this network.

    Microsoft has no such worries. Its core business — desktop software — is still producing healthy profits, which buys it time to experiment with its mobile strategy. It’s never had a market big enough to be worth fretting about so it isn’t hamstrung by expensive legacy systems or awkward agreements with mobile networks.

    Compared to BB10, Windows 8 is a clean slate, and one that meshes neatly with Microsoft’s new desktop and “cloud” offerings. It has huge momentum in the corporate market and a six-month head start on BlackBerry (Windows Phone 8 was released in October last year).

    Given its deeper pockets and richer ecosystem, Microsoft is the safer bet to take the number-three spot in the medium to long run. BlackBerry is likely to live on as a niche provider to those paranoid about snooping and in those countries where its brand is still strong. One thing is certain, though: short of a miracle, BlackBerry’s glory days are all in the past.  — (c) 2013 Mail & Guardian

    • Alistair Fairweather is the GM for digital operations at the Mail & Guardian
    • Visit the Mail & Guardian Online, the smart news source
    Alistair Fairweather Apple Arthur Goldstuck BlackBerry Microsoft
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticlePay TV: the price of pick and choose
    Next Article Green light for Eskom wind farm

    Related Posts

    Arm aims for leg-up in smartphone games with new chip tech

    29 June 2022

    Sony launches into PC gaming hardware

    29 June 2022

    How your business can help hybrid workers effectively

    28 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Think herding cats is tricky? Try herding a cloud

    29 June 2022

    How your business can help hybrid workers effectively

    28 June 2022

    Hands off our satellite spectrum!

    27 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.