Assessing BlackBerry’s smartphone dominance in Thailand

There is much talk of smartphones on this blog, and for good reason as the device type is bringing new levels of connectivity to consumers across Asia and other developing markets alike.

In Thailand, the smartphone market has been dominated by one brand in particular to date, BlackBerry.

To those familiar with Thailand, the sight of everyone from school girls, to indie wannabes, parents and even grandparents clutching a “BB” device is normal. But to anyone arriving new to the country from the west, where a BlackBerry is often referred to as a CrackBerry – a derogatory reference to business users hooked on checking company email – the sight is a strange one.

Credit for this huge popularity must be given to parent company RIM (Research In Motion) for  a triumph of marketing in an age where mobile and digital is blossoming into a huge market in Thailand (despite its 3G issues) and across Southeast Asia and the Asian continent as a whole.

So how has RIM Thailand developed its brand to appeal to non-business users and beat the iPhone? And how will RIM fare with smartphone ownership set to grow to a larger audience?

By the way, it is also worth considering these very factors for Indonesia where BlackBerry enjoys a similarly popular consumer following, though it also performs well in other Southeast Asian markets.

Strategic marketing & celebrity endorsement

RIM has an excellent track record of getting word of its devices out there, and positioning its brand as aspirational in the Thai market.

In addition to PR and marcoms efforts, RIM places significant emphasis on celebrity endorsements. That is to say celebs are given BlackBerry devices with the aim of building an association with them as pictures of them with the devices appear in newspapers and online.

In Thailand, this effort has been particularly successful with gossip and celebrity magazines frequently showing photos of famous celebrities clutching their precious BlackBerry phones, and speculation as to who has been messaging who using their devices is rife. This celebrity push generated a huge amount of interest in the devices and set them out as being cool.

Celebrity endorsements are not confined to Asia, and are very much used in western markets, so there is more to the success than simply using famous people.

Cost

With mobile internet usage in Asia increasing in recent years (last year AIS estimated the service has 12 million users in Thailand, with 18 million estimated in 2011) owning a smartphone to access the mobile web has become a growing consumer desire – as is indicated by GfK’s research reporting that one in 10 phones bought in Asia during the last quarter was a  smartphone.

In a country where smartphones are the phone of choice, price plays a huge part in the success of BlackBerry. With an iPhone likely to cost in excess of 20,000 THB, BlackBerry smartphones are available at a significantly lower price from around 11,500 THB at certain retail outlets (although officially priced at 15,000 THB).

Given that much of the basic functionality of an iPhone – mobile internet access, social networking, messaging, photos, calls, video playing etc – can be done on a BlackBerry, many are happy to purchase a BlackBerry at a considerably reduced cost, whilst bearing in mind they remain fairly trendy.

Working closely with operators

By making products available to a number of operators, RIM has benefited from the competition which sees each operator try to position itself as the best provider of BlackBerry devices in Thailand – the net result is an increase in BlackBerry marketing and awareness.

By contrast, the Apple iPhone was initially available to those on True Move only recently has the device has become available across other networks which has led to it becoming considerably more visible across Thailand. Although, like RIM, Apple does not provide statistics that would clearly illustrate this.

Competition

In Thailand BlackBerry enjoys a unique market position. Rival Nokia offers smartphones offering similar features at a comparable pricepoint however its range of devices – smartphone and non-smartphone – goes lower than BlackBerry which may have a somewhat adverse affect on its desirability and brand status.

Apple devices are likely considered more desirable in the west but a lack of support for BBM and a significantly greater price make BlackBerry the more affordable, convenient and (sometimes even) preferred option for many smartphone users in Thailand.

Other brands offer feature-rich smartphones, and BlackBerry style devices cheaper than RIM but ultimately their brand, reputation and quality of product all fall below the BlackBerry maker in Thailand.

Range of devices

BlackBerry has found success from offering a varied number of devices to consumers in Thailand. At the low end, a BlackBerry curve can be bought for less than 10,000 THB while mid-range devices include QWERTY-keyboard models and flip phones alike.

Both the BlackBerry Bold and newly introduced touch-screen Torch are available for similar price points as the iPhone models (which are priced based on memory capacity) which gives would-be RIM owners a comparatively wider choice of devices compared to Apple.

However, rumour has it that a $200 iPhone is being planned with the intention of offering a lower-cost device for emerging markets like Thailand. Although not confirmed by Apple, such a device could make a considerable dent on BlackBerry’s market share which is likely to suffer increase competition from the growth of Android-based devices in the country, as I mentioned in my predictions for 2011.

Already one such device, by SPRiiiNGTelecom, provides a user experience comparable to an entry-level BlackBerry but at the far lower cost of 5,000 THB – around one third of the standard cost of a Curve.

BBM

One key lure of the BlackBerry in Thailand is BlackBerry Messenger, an instant message system that is unique to BlackBerry smartphones.

BBM found popularity through RIM’s use of celebrities. Media gossip columns would regularly report and speculate about which celebrities were BBM’ing each other, with some magazines even interviewing celebs by BBM.

Of course the success of BBM ultimately boils down to BlackBerry devices gaining a critical mass in the market. Once this occurred, and a Thai consumer finds that many of their friends are using BBM, the idea of purchasing a BlackBerry become all the more compelling.

Equally BBM has become the ultimate example of cost efficiency. Tapping into this interest in BBM, many operators offer specific monthly tariffs which can be customised to include unlimited BBM usage, even if a user has opted not to include internet usage in their deal. With BBM, a user can contact their friends at any time without the cost of a phone call or SMS.

Timing

Timing is a key part of any successful business and BlackBerry’s arrival on the smartphone scene could scarcely have been better timed.

During late 2009 and the whole of 2010, when ownership of BlackBerry devices became more common amongst young people, coincided with huge growth in the usage of Facebook and other social networks like Twitter and Foursquare.

Offering a device that was affordable to many, sophisticated in comparison to many other devices and available on flexible and relatively inexpensive tariffs, BlackBerry rode the Facebook wave and provide Thailand’s new addicts with an access point to Facebook open 24 hours a day.

Add to that devoted apps for most social networks, and suddenly Thai consumers were able to easily access social networks with the freedom to upload and publish media directly from their handset.

And to 2011…?

As mentioned, BlackBerry has clearly established itself at the top of the smartphone tree in Thailand, however 2011 presents new challenges with BlackBerry is there to be shot at as the most popular smartphone brand in Thailand.

The arrival of cheaper hands powered by Android and the continued innovation from Apple, who launched the iPhone 4 in Thailand in August 2010, BlackBerry finds itself in the middle of the market as a compromise of a smartphone solution for those caught between a budget device and a high-end option.

The potential of the $200 iPhone and mid to high-range Android devices could cause some serious competition within the smartphone owning demographic in Thailand.

Though the BlackBerry Curve, RIM’s cheapest product, is comparatively well priced it remains out of reach financially for much of the mass market in Thailand, with other devices more affordable, despite special payment options that help spread the cost of device. So while BlackBerry is well placed with young consumers in urban areas, it is likely to miss out on ‘fat of the market’ with smartphone ownership tipped to spread beyond the affluent and middle classes in Thailand.

BBM remains a key selling point but with a growing number in Thailand communicating with friends through Facebook and Twitter, it remains to be seen how much of it draw BBM will remain and whether it will continue to compel users to buy BlackBerry smartphones just to use it.

Despite these challenges, I see BlackBerry losing some market share this year although it is likely to remain on top for a while yet. Next year will bring more rival devices and increased competition which, if RIM continues with its current strategy and pricing, is likely to see BlackBerry concede significant market share with Android the most likely to take over at the top with its greater range of devices and price points.

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