09 Mar 2017
Jakarta, 9 March 2017 – In the light of HMD Global’s launch of Nokia-branded phones at Mobile World Congress as well as today's launch of the BlackBerry Aurora by PT BB Merah Putih, International Data Corporation (IDC) believes that the Indonesian market will be a challenging ground for those brands to re-enter. The market has changed considerably since their glory days, and the competition in various forms will critically hinder its growth in the local market, particularly in the smartphone space.
IDC believes their present attempt by switching to Android combined with its branding will make it more acceptable. Indonesia was one of BlackBerry and Nokia’s largest markets globally a few years back. BlackBerry was #1 in Indonesia smartphones in 2012, while Nokia/Microsoft was #1 in total mobile phones (including feature phones) in the same year. Along with the addiction to the QWERTY keypad, the BBM messenger played a big role in getting the BlackBerry in the hands of smartphone users in those days. But BBM is available on other devices now, and device competition has changed too, especially with the presence of aggressive China-based vendors like OPPO.
“The Nokia and BlackBerry’s smartphones have decent specs, but they are priced to compete where the China-based vendors have already made their domain. These China-based vendors have successfully established themselves not only at the right price-point but also with socially popular features such a selfie enhancing front cameras. This is where Nokia and BlackBerry is challenged as just having decent specs would be insufficient for end-users to gain purchase interest,” says Risky Febrian, Associate Market Analyst for Mobile Phone of International Data Corporation (IDC) Indonesia.
The TKDN regulation will be another barrier for entry as the Indonesian government has decreed that all 4G phones must comply with the 30% local content rule in 2017. While this may not affect the entrance of the BlackBerry Aurora that already complied with the regulation, this impacts its competitive edge for Nokia’s smartphones should the compliance procedure could take a considerable amount of time for it to be approved. How or whether if Nokia will comply with this regulation remains uncertain up to date.
Risky adds, “Regardless of those challenges, Nokia and BlackBerry should focus more on their marketing strategy in Indonesia, as the combination of aggressive below the line and above the line marketing proved to be successful in term of driving the growth of smartphone sell-out in the market.”
Another headline grabber earlier was the feature phone, the Nokia 3310 remake as it has successfully captured the attention of Indonesians on the Nokia brand. Especially given the strong brand legacy of Nokia in Indonesia years ago.
“The Nokia 3310 remake would be a great start for Nokia to make its mark again in Indonesia. But it rides largely on nostalgia and with limited features, meant to only target a niche group of users who grew up with that model in the past. Apart from these users, the market may not react well to it due to its price of Rp 700,000 (US$ 52), nearly double the average selling price of other feature phones in the market.“, Risky further explains.
In 2016, Nokia lead the feature phone market with 24.9% market share under Microsoft ownership. IDC Indonesia estimates that a total of 49 million mobile phones will be shipped in to the country by the end of 2017, dominated by smartphones with 32 million units, and followed by feature phones with around 17 million units. As the operating system dominated by Android with almost 99% share in the market.
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.