Sunil Dutt’s exit may dampen BlackBerry’s prospects in India

 First Published: Sat, Mar 09 2013. 12 06 AM IST

 

 Sunil Dutt had joined Canadian smartphone maker BlackBerry in 2011. Photo: Hemant Mishra/Mint 

 

Updated: Sun, Mar 10 2013. 11 27 PM IST

New Delhi: Sunil Dutt’s resignation on Friday as managing director of Research in Motion India Pvt. Ltd, makers of BlackBerry phones, is likely to once again dampen the prospects of the firm in India, say analysts.

RIM, now renamed BlackBerry, was beginning to demonstrate a renewed vigour, both globally and in India, with the launch of its touch-based Z10 handset last month.

Until a new head is named, Rick Costanzo, executive vice-president for global sales, will lead the team in India—“an extremely important market for BlackBerry”, a company spokesman said. “Our aim is to continue to build on our recent momentum with the launch of BlackBerry 10.”

Dutt, who resigned after just 14 months at the top, on Saturday declined to reveal his plans immediately saying he had signed a non-disclosure agreement with a “new company” earlier in the day. “I had to move on since I cannot put my feet in two boats,” he said, adding his decision had nothing to do with the performance of the Z10.

“This is bad news for BlackBerry. They could have used someone as Dutt at this stage to consolidate their strong brand equity in India and to spread their distribution far and wide for Z10 and other BB10 devices,” said Jayanth Kolla, partner at research firm Convergence Catalyst.

BlackBerry’s smartphone market share in India fell from around 15% in 2011 to less than 8% in 2012, Convergence Catalyst estimates.

RIM shipped about 5.5 million smartphones to India between January and July 2012, accounting for 12.1% of such shipments to the country, compared with Samsung Electronics (India) Pvt. Ltd’s 41.6% share and Nokia India Pvt. Ltd’s 19.2%, according to a report in October by CyberMedia Research.

Dutt, an industry veteran, was instrumental in setting up the distribution networks of Finnish mobile maker Nokia as well as South Korean electronics company Samsung in India.

Dutt was sales director at Nokia from 2002 to 2007 before he moved to Samsung as country head until 2009. Before joining BlackBerry in December 2011, he worked as president, personal systems group, at Hewlett-Packard India Sales Pvt. Ltd.

Dutt said the Z10 is doing well in India. “In fact, its success is something that spurred me to take the decision of moving out since the company is in the hands of an able team,” he said.

Though priced at Rs.43,490, “corporate customers have shown a lot of interest for the new model of BlackBerry—the Z10—and we are looking into the enquiries,” said K. Jaishankar, managing director of Ingram Micro India Pvt. Ltd, a distributor of BlackBerry and other smartphones. He did not share specific numbers.

Analysts expect the Indian smartphone segment to see high activity this year as the new BlackBerry 10 devices begin jostling for share in an Android-dominated market.

“Replacement smartphones are dominated by Apple’s iOS (operating system) while Google Inc.’s Android OS is dominating the market for first smartphone purchases,” said Sandip Biswas, director of Deloitte Touche Tohmatsu India Pvt. Ltd, a research firm.

In a media briefing in Waterloo, Canada, on 13 February, Thorsten Heins, president and chief executive of BlackBerry, said the Z10 and Q10 (a Qwerty-based model that’s yet to be launched) smartphones “will help resurrect the company’s fortunes”.

“Our 80 million subscribers want us to be successful and this new platform (BB10) will help us do so by making us a leader in the mobile computing segment...India is one of our very important growth markets,” he said


ADITYA KUMAR SINGH
PGDM 2 SEM