BlackBerry (NASDAQ:BBRY) made a very smart move recently that surprised me a lot. In its effort to promote BBM as a communication and social network application, BlackBerry announced that OEMs in many emerging markets will now preinstall BBM on many Google (NASDAQ:GOOG) Android devices they sell:
WATERLOO, ON - BBM™ will soon come preinstalled on a variety of Android™-based smartphones from leading OEMs across Africa, India, Indonesia, Latin America and the Middle East. Beginning next month, Android smartphones from Be, Brightstar, Celkon, EVERCOSS, IMO, Micromax, Mito, Snexian, Spice, TECNO, TiPhone and Zen will include BBM preinstalled. In addition, BlackBerry® confirmed that BBM will also continue to be available as a free download from Android app stores, including Google Play.
While many of these OEMs are unknown to many people in the U.S. and Europe, they are significant players in their respective markets.
Let me remind readers of the importance of this news. As I have written before, BlackBerry at one point dominated many emerging markets like Indonesia. In fact in Indonesia, BlackBerry at one point had a market share of about 50%.
Today of course BlackBerry is losing ground to Google Android devices and Microsoft's (NASDAQ:MSFT) WP8 phones are on the rise. And chances are that until BlackBerry comes up with a very low-end priced device, I do not think that BlackBerry will ever again gain a respected share of the Indonesian market.
However what is important about this announcement is that at the very least, BlackBerry will remain relevant and in the spotlight. How so? Well, because all those people around the world in many of these emerging markets that at one time or another were using a BlackBerry device, were also using BBM.
So in many of these markets, now that BBM is available for Android and iOS, people will be using it, because many of their friends who still use BlackBerry, also use it. Will this translate into device sales in these markets? Not by much initially, but yes it will.
See, if people will be able to communicate with their friends who use Android devices, it means they don't have to buy an Android device to use a common messaging app anymore, because now their friends can use BBM for Android. So for all those people who were forced to buy something other than BlackBerry, now they don't have to buy something else other than BlackBerry, because their friends can use BBM.
Let me give you an example of this. Did you know that recently BlackBerry gained market share in South Africa and even outpaced Samsung (OTC:SSNLF)? Yes it's true. According to research done by World Wide Worx, in their 2014 Mobility report (via zdnet), BlackBerry has significantly increased its overall share of the South African handset market, both for feature-phones and smartphones.
Last year (according to the report), both BlackBerry and Samsung had about an 18% market share, but this year the figures show that BlackBerry's market share has increased to 23%, while Samsung climbed a notch to 19%, with market leader Nokia (NYSE:NOK) falling from 50% to 44%.
Something else is also interesting. Again, according to World Wide Worx, the biggest increases in specific uses of data on the phone were seen in instant messaging services, with more than a fivefold increase in the proportion of BBM users in the past 18 months, from 3% to 17% of adult cellphone users living in cities and towns, while WhatsApp is used by a quarter of adult cellphone users.
So in other words, in many emerging markets, messaging usage is very important and from the looks of it, while there are other messaging services that are ahead of BBM, a fivefold increase in BBM usage in South Africa in one year is not a small figure.
And because messaging is becoming so important in many emerging markets, is probably the reason why BBM for Android has been preinstalled in Samsung devices in Sub-Sahara countries for some time now.
So is this a smart move on behalf of BlackBerry? Yes I think it is, and I think in due time it will make a difference, because at the very least, it keeps BlackBerry relevant in the social messaging space. And while it is still open to debate if BBM ever becomes big enough to be able to provide BlackBerry with any revenue on its own, at least it's a very good marketing tool for BlackBerry, that over time will impact devices sales, as in the case of South Africa.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.