High penetration of smart phones has undoubtedly eclipsed the demand of traditional feature phones in the high tech era of computer technology. The innovation, dynamics and fast moving technical advancement in mobile technology has reached a point that many phones that are considered feature phones today can have capabilities that exceed those of phones that had been promoted as smart phones in the past.
Smart phone
A smart phone is a high-end mobile phone that combines the functions of a personal digital assistant (PDA) and a mobile phone. In today’s world, mobile phones are not a mere tool of making or receiving a call. They have turned in to a mobile office, work station or even a net cafe. Therefore, the smart phone models typically also serve as portable media players and camera phones with high-resolution touch screens, web browsers that can access and properly display standard web pages rather than only mobile-optimized sites, GPS navigation, Wi-Fi and mobile broadband access. The term smart phone is usually used to describe phones with more advanced computing ability and connectivity than a contemporary feature phone. Smart phones run mobile operating systems such as Apple’s iOS, Google’s Android, Microsoft’s Windows Phone, Nokia’s Symbian, RIM’s Blackberry OS, and embedded Linux distributions such as Maemo and MeeGo. Such systems can be installed on many different phone models, and typically each device can receive multiple OS software updates over its lifetime.
Blackberry in turmoil
Research in Motion (RIM), a Canadian company that introduced a decade old Blackberry, has received the biggest jolt to its credibility as millions of subscribers were disappointed as their emails around the world were stranded in the system due to an inexplicable glitch causing disruptions in many countries. The company scrambled for more than 72 hours to restore service to millions of Blackberry users around the world. The system-wide failure, which continued for four consecutive days, left tens of millions of frustrated Blackberry users on five continents without email, instant messaging and browsing. By the time the company was able to restore the service, the damage to its reputation had already been done because thousands of new orders were cancelled due to the vulnerability of Blackberry’s potential disruptions. The worst ever ‘Blackberry blackout’ caused gross inconvenience to users including office workers, government officials, emergency responders and others who rely on the messaging device. The intermittent service disruptions come at a vulnerable time for RIM, which has been struggling with dwindling Blackberry shipments as it competes with Inc.’s iPhone and gadgets powered by Inc.’s Android software. The disruptions in email, instant-messaging and Web browsing—which forced many Blackberry users to resort to phone calls and faxes—affected most of the Canadian company’s key markets, including North America, Europe and Asia, and a big chunk of its 70 million world-wide subscribers.
Share prices
RIM, whose share price has tumbled this year, is already reeling after a series of profit warnings and product missteps. The service disruption could cost the Blackberry maker millions of dollars in compensation to customers who lost service. Experts say it could also damage Blackberry’s reputation for reliability, one of its chief selling points. The customers who have a loyalty bond with their favourite Blackberry are looking forward to have compensation in two ways: a compensation for the inconvenience and a future guarantee of trouble-free service. A Spanish consumer watchdog organisation FACUA estimated compensation that should range from 32 cents to $2.67 per day of outage. If that rate were applied globally to Blackberry’s roughly 70 million customers, costs could rise to nearly $190 million per day of service disruption. immediately as investors worried that the problem would undermine Blackberry’s reputation for reliability. The stock gave up a further 15 cents, or 0.6 per cent, to $24.12 after 24 hours on the Toronto Stock Exchange. It shows that the disruption has substantially tarnished RIM’s image and put a serious set back in its drive to catch up with Apple and other smart phone rivals.
Impact in Pakistan
An amazing aspect of Blackberry episode is that Pakistan is among the least affected countries during the glitch period. It is not because the Blackberry worked efficiently during the network failure but due to low penetration of smart phones in Pakistan. It is an objective analysis that smart phones in Pakistan haven’t really picked up much steam. There are in Pakistan right now and phone density is 63 per cent (according to PTA, other estimates from different institutes provide a lower figure), but smart phone usage is surprisingly limited. It is because Pakistani market is the most price-conscious market where affordability factor is reigning supreme. Smart phones have taken the world by storm in recent years. Worldwide, smart phone usage has jumped 79 per cent in the past year and around 450 million smart phones are expected to ship worldwide this year. Estimates suggest that smart phone share in Pakistan is 5 per cent of the total mobile phone market (E Series from Nokia and Blackberries are counted in this). A blogger Syed Talat wrote, “low penetration of smart phone is because of high prices of smart phones in Pakistan. In UK and other countries, the model adopted by network providers which is popular is contract based. So an iPhone 4 in other countries might cost around $199 dollars which translates to Rs17, 000 on contract. But the same iPhone here costs around Rs55,000”. Those networks, for instance in UK, offer the phones for cheap rates because they can recover their money and make a profit by the data plans offered in the contracts. The phones only run on network with which you have a contract and these networks have huge user bases so even if they breakeven in the 17th month of a 2 year contract, they will still make huge profits.
Alternatives threatening
consumer base
Coming back to the topic, if you’re a Blackberry user, especially a consumer right now, you’ve every right to questioning do I stick with this product? Do I stick with this network or is it time to jump from the sinking ship? Not only do they have to win back the trust, but they have to make the Blackberry platform more attractive than its rivals. Experts say that there are plenty of more consumer-friendly options out there tempting RIM’s customer base. “The iOS platform, Apple platform is easier to use, it’s more fun and it’s got way better marketing. The Android platform, there are dozens of phones at extremely low price points and a whole developer network”, said an industry watch dog. The recent service disruption comes toward the end of a tough year for RIM. Company shares have fallen sixty per cent in 2011 and the core leadership has faced plenty of investor unhappiness, some calling for a new team and even a complete takeover. Even though RIM has restored Blackberry service, it’s only put the spotlight on plenty of other glaring problems including administration, marketing, financial management, bringing innovation and on top of all this the consumer confidence to stay on the road to profit and popularity.