Research In Motion (RIM), makers of BlackBerry phones, may be facing one of its worst crisis the world over, but Indian consumers don’t seem to be too bothered about the security concerns being voiced by the government.
Sales of the high-end phones have not been impacted. For example, retail chains such as Croma, Hotspot and E-Zone say it’s business as usual.
Infiniti Retail CEO Ajit Joshi says buyers of BlackBerry are sure that some kind of arrangement will happen between the government and the company. “I do not see any decline in sales. Once this issue is resolved, I feel the sale of BlackBerry will go up further and the launch of BlackBerry's Torch will add to the excitement,” he says.
Sanjeev Mahajan, Chief Executive Officer of Hotspot, also says so far there has been no tangible dip in the sales of BlackBerry at the company’s outlets. “The only change we have seen is that customers want to know what will happen if the services are discontinued,” he says.
“The immediate impact could be a wait-and-watch situation at both the corporate and retail segment. But I do not think that the government will ban the use of BlackBerry completely. The other issue is that there is a huge gap between what BlackBerry provides to users and what others do,” says Naveen Mishra, Lead Analyst, Mobile Handsets Research, IDC India.
Analysts say BlackBerry’s advantage lies in pricing and its recent move to strengthen its retail base. Romal Shetty of KPMG says the higher end BlackBerry comes at around Rs 25,000-26,000, whereas a high-end iphone costs around Rs 40,000. “I don’t think companies will shift to iphones because the price difference is very high. BlackBerry is very convenient from an enterprise perspective. It is encrypted and has certain advantages over other phones,” he said.
Also, the recent focus of RIM to tap the retail customer has also helped it to penetrate the market. For instance, RIM, which earlier had presence in only nine cities in India, has increased it to 70 cities.
BlackBerry can take comfort from the fact that sales didn’t suffer when RIM went through a similar situation in 2008. According to research firm IDC, calendar year 2008 saw a total of 100,000 unit shipment, which increased to 170,000 in 2009 and it is expected to touch 350,000 for 2010.
When contacted, the RIM spokesperson declined to comment on sales impact, as it does not give region-specific sales. However, according to the company’s recent results, it shipped 11.2 million devices in the first quarter ending May 2010. The company managed to meet the lower-end of its guidance.
The controversy started two weeks back as the government asked the Canadian company to allow it to access its proprietary technology. BlackBerry has an encryption code to the messages sent from its phone, which cannot be intercepted by Indian security agencies which are battling terrorism.
India is among several countries that have warned RIM to stop its BlackBerry services as security agencies can't monitor such services.
In India, RIM has been in discussions with the Department of Telecommunications over the country's concerns that terrorists may use the services.
Kunal Bajaj, head of Analysys Mason, is of the opinion that the government will not seek a total ban on RIM services.
That must be music to RIM’s ears.
| What is BlackBerry push mail? Research in Motion (RIM), the creator of the BlackBerry mobile platform has been a pioneer in push emails. Whenever an email is sent to the user, RIM’s servers immediately “push” it to the user’s BlackBerry device. Unless the device is turned off, emails appear instantly and, thus users are never out of reach for business. What is the Indian government asking RIM to do? The Indian government wants BlackBerry to allow monitoring of emails and personal instant messages (PIM) sent to user devices. The government fears misuse of RIM’s devices by terrorists for communication. But RIM insists that the security architecture for its enterprise customers is based on a symmetric key system that allows only the customer to create and possess an authentication (or unique) key for all data exchanged and stored in an encrypted format between the handset and RIM server. BlackBerry users’ data remains on the main (originating) email account and so there is always the option of deleting mail from the handheld device while still keeping messages safely stored within their actual accounts. What are the possible solutions? Security experts suggest that Indian authorities can demand installation of an electronic monitoring device on the BlackBerry servers – which may be run by RIM for its retail customers or on servers that are installed for RIM’s enterprise customers. Since data remains encrypted through all points of transfer between the customer’s BlackBerry Enterprise Server and the device, the government wants RIM to ensure that security agencies can decrypt (read) the data transferred between server and handheld, if need be. Compiled by Priyanka Joshi |
