Ripe for the picking

As second quarter shipments of BlackBerry smartphones in the EMEA jumped almost 65 per cent year-on-year, Khaled Kefel, Research In Motion’s sales director for the Middle East, tells Michelle Mills why this region offers significant opportunities for the Canadian manufacturer. Kefel also confirms plans to open a RIM office in Dubai before year-end

Sales director Khaled Kefel says RIM is making a conscious move to be more appealing to everyday consumers and widen BlackBerry’s core subscriber base. The company will open an office in Dubai before year-end

It is only a matter of time before a satellite office is established to serve as a hub for the GCC,” Khaled Kefel, Research In Motion’s (RIM) sales director for the Middle East told Comm. on a visit to Dubai last month.

“Now that the service is in the Middle East and there is good adoption of it, we will certainly have a local presence here. I would anticipate within the next couple of months.”

Currently the closest RIM office is in Turkey, though most activities for the Middle East and Africa are administered from the company’s Toronto headquarters. Since first launching the BlackBerry solution in South Africa for Vodacom in late-2005, and in the UAE with Etisalat in mid-2006, RIM has been aggressive in partnering with regional operators to offer the push-email device and accompanying enterprise servers. Today, approximately 13 operators in eight Middle East countries and 13 operators in 11 countries in Africa offer BlackBerry solutions.

As new rollouts occurred in the past six months with Nawras in Oman, UAE’s du and Celtel Zambia (now Zain), growth prospects remain robust with a good number of operators in countries where BlackBerry services have already been deployed, and even more countries in the region where the solution is yet to be launched at all.

“Even with all the growth and the pattern we see in the market, this is just the tip of the iceberg,” asserts Kefel. “There are many places in the world that we really haven’t scratched the surface yet, so the growth is going to come from anywhere the service is needed and where there are enterprises. Emerging markets are certainly one of those areas.”

While RIM does not breakdown financial results by geography, Kefel states that the MEA region is growing according to the company’s expectations. In the manufacturer’s fiscal Q209 results for the period to end-August, global revenue amounted to US$2.58 billion, up 15 per cent from the previous quarter, and an increase of 88 per cent from US$1.37 billion in the same quarter last year.

The revenue was divided approximately 82 per cent from devices, 13 per cent from services, three per cent from software and two per cent from other revenue. During the latest fiscal quarter, RIM shipped approximately 6.1 million devices, up 12 per cent from the previous quarter. RIM also added 2.6 million new subscriber accounts to bring the subscriber base to around 19 million worldwide. The average selling price was US$341 in both the fiscal year 2009 and fiscal year 2008.

In terms of competition, there have been growing comparisons between the iPhone and BlackBerry devices, with some market commentators forecasting that the Apple-manufactured 3G version of the iPhone is likely to compete head –to-head with RIM’s devices. However, Kefel remains confident of the Canadian manufacturer’s market position and vision.

“We take every competitor and every technology that comes out seriously, but from the perspective of being an actual threat to RIM’s base users and the business community? I personally do not see the iPhone as a serious threat, and the underlying reason for that would be security,” Kefel contends.

According to Kefel, BlackBerrys are built with security at the heart of the device, meaning there is no way to tamper with information on it, be it on the handheld itself or when data is in transit over the air. He asserts that data is encrypted in such a way that a hacker would not be able to hack into any messages that are transmitted, anywhere between the sender and the recipient.

It is these security features that Kefel believes have been the key to gaining the trust of some of the most influential and security-conscious governmental, financial and business organisations across the world. In April, the USA’s Federal Bureau of Intelligence (FBI) announced the deployment of 19,500 BlackBerry 8830 World Edition smartphones to more than 56 offices worldwide.

The devices were part of the agency’s “Sensitive But Unclassified (SBU) Mobility Programme,” which provides agents with mobile access to federal law enforcement information that was previously inaccessible from handheld wireless devices.

“These devices allow FBI employees’ access not only to the Internet, email, calendar and taskings,” commented the FBI’s chief information officer Zalmai Azmi, “but also to applications critical to our missions such as the no-fly list, missing and kidnapped persons and crime alerts.”

Thus while Kefel applauds the aesthetic value of the iPhone, he is confident of BlackBerry’s continued popularity within the enterprise space.

“We don’t see the iPhone being able to compete at that level [of security]. From an enterprise perspective I don’t see a true penetration,” comments Kefel.

“Sure, some enterprises may choose to pick up the iPhone and use it, but those enterprises that are very conscious of the security of their back-end would have to do some serious evaluation before they would consider putting a non-BlackBerry solution in their own environment.”

And as RIM looks to maintain its dominance in the corporate space, the vendor is also making a conscious move towards being more appealing in the consumer space in a bid to broaden its customer base. Design has evolved from the blocky original models a decade ago, to smaller and curvier devices like the Pearl and the Bold.

The first clamshell model was unveiled in September, named the Pearl Flip 8220, and featured a light-sensing external display that allows users to preview incoming calls, messages and emails, without opening the handset.

“These devices are very hot – people love to carry them, put them on the table and showcase them to their friends. We will continue to innovate and provide a lifestyle experience. Obviously it meets all the requirements of a corporate environment but it doesn’t have to be big and bulky,” says Kefel.

RIM also expects a large proportion of growth to come from the non-corporate sector – from university students to ‘soccer mums’ – as more applications and features are enabled to suit such lifestyles, including applications like Facebook for BlackBerry, Google Talk and Windows Live Messenger.

Apple has been hugely successful in harnessing the worldwide developer community to create applications for the iPhone with more than 250,000 software development kits downloaded within three months of release of the 3G version of the device earlier this year.

RIM has also been active in partnering with developers, with the development page on its website allowing such individuals to download entire development kits with samples of what they can create, how to test it, and even offers simulators to show how the application would look on the handset.

Many of the personal applications developed for BlackBerry have been created by regular people, such as stock portfolio and weather forecast applications, and games like Sudoku.

Speculation is rife that a BlackBerry touch screen device is on the cards, though Kefel remains tight-lipped about such a release.

“This is something that I’m unable to comment on right now…but nothing is impossible. It all has to do with the different markets and the demand that is out there, so I wouldn’t be surprised to see something coming out that has that capability.”