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BlackBerry's Indian Demand Slumps

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Research In Motion Limited continues its trend of losing market share even in the densely populated Indian market. Per the research firm IDC, the company’s handset shipment dropped to 5.9% from 12.8% in 2010, still better than its overall market share of 4.6%.

Research In Motion, which once dominated the smartphone market failed to upgrade its operating platform, losing market traction to Apple Inc.’s (AAPL - Free Report) iOS and Google Inc.’s Android operating systems during the past few years, mostly in highly developed countries of North America and Europe. In 2012, the company sold nearly 32.5 million smartphones as compared to Samsung Electronics’ 216 million and Apple Inc.’s 136 million handsets.

In a bid to keep its handset business alive, Research In Motion slashed its smartphone prices to target emerging nations like China and India. Both these countries are having huge mobile subscriber base and are less influenced by high-valued iPhones.

Moreover, people of these two countries are highly price sensitive and BlackBerry devices perform better on less advanced wireless networks. So, selling its smartphones at lower price points will trigger huge demand across these nations.

Indian mobile phone market represents nearly 150 different handset manufacturers selling mostly feature phones. Therefore, selling of smartphones by Research In Motion at a much reduced price coupled with the roll out of 3G services across the country will further propel demand for smartphones in the forthcoming years. Indian feature market grew 16% year over year while smartphone market expanded 48% annually.

However, Research In Motion’s objective to gain market traction in developing nations like India seems to be a distant dream as the country is hugely dominated by Samsung devices and Nokia Corp.’s (NOK - Free Report) Asha range of low-end smartphones. Moreover, home-grown handset makers like Micromax and Karbonn are continuously launching low priced Android-based smartphones, thereby intensifying competition within the low-end smartphone market.

To retain its market share in a mobile crazy country like India, Research In Motion launched its new BB10-based Z10 smartphones, which supports QNX-based open-source platform like Android and iOS. Hence, it remains a big test for the BlackBerry maker to keep its business going in an emerging country like India.

Currently, Research In Motion carries a Zacks Rank #3 (Hold).

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