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Will Emerging Markets Continue to be the Bright Spot for RIM
Research in Motion (RIM) is going through a rough phase, although It recovered significantly in Q3 2011 with revenues up by 24% and smartphone shipments up by 33% from the last quarter. The Q3 success can be attributed to the good uptake of OS 7 devices but the question remains whether RIM will be able to continue this momentum in the next few quarters also? It will not be easy, as its QNX device launch is expected to be delayed at a time when new competitive device launches (notably Nokia’s Lumia and Samsung’s Galaxy range) will hit the stores in most markets in the next couple of quarters. But emerging markets is still a good bet for the struggling handset vendor. RIM’s emerging markets revenue grew significantly from US$ 1.69 in fiscal year Q2 2011 to US$ 2.33 in fiscal year Q2 2012 when other geographies saw negative growth in the same period. Blackberry still holds an aspirational value in most of the emerging markets and with data services just starting to pick up there is more potential left for handset vendors like RIM in emerging markets than in developed markets where data uptake is high and competition is intense. At present RIM is playing to its strengths in emerging markets with features like BBM and enterprise email, but competition is fast catching up and is offering similar solutions. RIM will have to redesign its emerging market strategy to remain competitive. It can’t afford to hit a rough patch in emerging markets while it struggles in developed countries.