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Update: RIM's Long March to China

By James Alan Miller
May 11, 2006

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After two years of negotiations, bureaucratic hassles and delays, Research In Motion (RIM) is finally set to launch its e-mail service in China. Its partner, the mainland's largest carrier, China Mobile, will start to roll out BlackBerry solutions next week. The strategy is to first target the smaller - but still several hundred thousand strong - corporate customer segment in the country before looking toward China's much larger number of native professional users.

China is the world's largest cell phone market, surpassing 400 million users in February, according to the government's official Xinhua News Agency. China Mobile serves two-thirds of these subscribers.

Initially, the companies will focus on multinational corporations with operations in China, after which China Mobile will deliver SIM cards to support BlackBerry service across the country.

The BlackBerry handhelds themselves and BlackBerry Enterprise Server won't arrive until some unspecified later date. So most home-grown companies in China won't gain access to RIM's push e-mail and data access solutions until then.

BlackBerry owners from outside of the country can use their devices when roaming on China Mobile's GSM/GPRS network today, well before this announcement.

RIM Chairman & co-CEo Jim Balsillie said in statement, "We are very excited to bring BlackBerry to China. The collaboration of China Mobile and RIM will extend the reach of BlackBerry to a large and important market."

Balsillie told Reuters, "It's a very important market because one: it's so big, two: so many of our customers do business here."

Some analysts aren't so keen on the RIM's prospects in the Chinese market. The initial limit to multinationals could have a serious effect on BlackBerry distribution.

The company may not have won government approval to distribute service more widely, according to Dow Jones, because its security and encryption technology makes it difficult for Chinese authorities to monitor e-mail. This may be why it took RIM two years to enter the market in the first place.

In addition, the Dow Jones points out BlackBerry handhelds may not be stylish enough for many of the mainland's consumers.

Gartner analyst Ken Dulaney explained to internetnews that it may be difficult for RIM's e-mail solutions to gain credibility in a country where a single carrier, China Mobile, for example, handles 800 million text messages daily

"Chinese really don't accept e-mail," Dulaney told internetnews.

Like anywhere else, the mobile e-mail market in China is more competitive today than when RIM first considered it a few years ago. The second largest carrier in the country, China Unicom, recently launched a push e-mail service of its own called RedBerry.

The RedBerry name itself would raise trademark red flags almost anywhere else. During its introduction a month ago, however, the China Daily proclaimed RedBerry was "a clear sign that the firm is ready to challenge the BlackBerry push-mail service," and China Unicom promoted the brand as extending "the vivid name of BlackBerry that people are already familiar with."

RIM hasn't indicated whether it'll challenge China Unicom over RedBerry in court, a process that could take years.

Unlike BlackBerry, RedBerry doesn't use a proprietary handset, but rather pushes e-mail - whenever it arrives to a user's inbox - to the standard CDMA cell phones China Unicom already supports. It's also a lot cheaper: a dollar a month plus a few cents per e-mail compared the typical $50 price tag for unlimited BlackBerry service.

Balsillie doesn't appear too concerned about RedBerry, at least not yet. "It's still very early to really comment or do anything about it," he said to Reuters. "It's really a bit of a much ado about nothing until they really get some sales."

But it's not just RedBerry. In addition, China Mobile is set to offer a cheaper BlackBerry alternative of its own, called PushMail, for a reported $12 per month.

In addition to China, BlackBerry service is already available throughout Asia, in places like Hong Kong (a China Special Administrative Region), Singapore, and the Philippines; and it may hit Japan before the end of this year rather than sometime next year, as was expected, because pilot programs there have been progressing ahead of scheduled.



Related Links:

  • RIM in China: BlackBerry Vs. RedBerry
  • Visto Talks Wireless E-Mail, RIM
  • RIM Determined to Stay Number One
  • RIM Comes Up Short
  • BlackBerry 8707v with 3G Revealed

     
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