Is BlackBerry Smart to Ignore Japan?

Call me crazy, but for a struggling smartphone company trying to prove its viability to the world, it just doesn't seem like a great idea to brush off a nation with more than 126 million potential customers.

Even still, as fellow Fool contributor Dan Radovsky noted yesterday, Canadian smartphone maker BlackBerry (NASDAQ: BBRY  ) has confirmed early reports that it won't release its new BlackBerry 10 devices in Japan.

In citing the reasons for giving the cold shoulder to the country, a company spokesperson stated it didn't qualify as a "major market" for BlackBerry. Furthermore, while the company will continue to support the small existing number of current active users in Japan, BlackBerry representatives also asserted they couldn't justify the cost of modifying the new operating system to accommodate the Japanese language.

Picking its battles
So what's the problem with this thinking? Japan remains an enormously strong market with massive sales potential -- just not for BlackBerry. According to a comScore report released in August, Google's (NASDAQ: GOOGL  ) Android operating system accounted for a whopping 64.1% of all smartphones in Japan at the time, followed by devices powered by Apple's (NASDAQ: AAPL  ) iOS, which claimed 32.3% of the market.

Unfortunately for BlackBerry, the worldwide smartphone market has shifted even further in favor of Android and iOS since last August. According to the latest report from Canalys released just yesterday, Android devices made up 69% of the 216.5 million smartphones shipped in the fourth quarter of 2012, followed by Apple's iOS, whose share grew from 15% to an even more impressive 22% following the launch of its iPhone 5. Even so, while BlackBerry CEO Thorsten Heins has admitted his company is fine settling for third place and battling with the less-popular Windows Phone 8 devices, that won't make competitors like Nokia any less formidable.

Ignoring a nation
In addition, according to The Nikkei, the number of smartphones sold in Japan rose to more than 14 million last year, bringing the total number of smartphone users in the country to 24 million. For its part, BlackBerry sold less than 100,000 phones in Japan during the same period, so it's certainly understandable why it would want to bow out and place its limited focus on stronger markets. However, if BlackBerry management had plans for launching new products in Japan down the road -- say, once their latest phones manage to gain traction in other more important markets -- something tells me they'll be fighting an uphill battle to wash away the bad aftertaste this decision has left with Japanese consumers.

There's no doubt BlackBerry's doing everything in its power to regain even a fraction of its former glory. That said, the decision to effectively write off an entire developed nation, however insignificant to its bottom line, seems shortsighted at best.

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Read/Post Comments (17) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 12, 2013, at 11:36 PM, TimKnows wrote:

    We can always expect a dumb article to come from this site, this time a Fool thinks that BlackBerry should spend $ 100 million dollars to go after 100,000 consumers. Do you know something? That was rhetorical as you clearly don't, most of those costumers will buy the Z10 anyway.

  • Report this Comment On February 13, 2013, at 9:47 AM, cbglobal wrote:

    Panasonic decided 7 years ago not to sell their phones in the USA. But you did not know that. Google Panasonic smartphones and see the beautiful phones they do not care to sell you.

  • Report this Comment On February 13, 2013, at 9:48 AM, voytekp wrote:

    @ TimKnows - Excellent point.

    Another one would be to think about the possibility of Sony becoming a Blackberry partner to license BB10 platform so that Sony can make their version of BB10 for their market.

  • Report this Comment On February 13, 2013, at 9:50 AM, Arthur1111 wrote:

    It was a smart decision. Maybe BlackBerry should ignore the US next. And, maybe BlackBerry should be bought by Lenovo and goes to China. It will be in a far place that you Fools don't have to worry about it anymore.

  • Report this Comment On February 13, 2013, at 9:57 AM, cbglobal wrote:

    I believe Japan uses frequencies and some technologies that differ from the rest of the plant. So BB would have to develop a special phone just for Japan.

    As a follow up....Panasonic decided the USA market was a waste of time and resources, ie, spend tens of millions developing a phone that would be sold at no profit.

  • Report this Comment On February 13, 2013, at 10:04 AM, eidsonb wrote:

    @voytekp...one thing everyone is missing is that one of the newest board members has Sony Connections. This is a short term choice to shore up the base, countries that they do well in or are still a player then spend the money to adapt BB10 to japan or license it...If Apple would have done this the author would have endorsed it....

  • Report this Comment On February 13, 2013, at 10:05 AM, RandomMeaning wrote:

    "We can always expect a dumb article to come from this site, this time a Fool thinks that BlackBerry should spend $ 100 million dollars to go after 100,000 consumers. Do you know something? That was rhetorical as you clearly don't, most of those costumers will buy the Z10 anyway."

    I don't think you really thought this through. Exactly why would Japanese customers by a Z10 "anyway" when it's not in their language, no native support for maps in their language, no apps in their language, etcetera?

    In regards to not launching the Z10 in Japan at this time, I think that's understandable. Blackberry has a limited amount of resources and are going to shore up their strongholds first. That is a wise decision. Making an announcement about skipping the Japanese market is a leadership and marketing blunder. Not on the level of "the burning platform" or "touch screen phones are a fad" but a needless mistake. They would have been better off being coy and saying something along the lines of "we are currently studying the Japanese market so that our next entry will well suited for their specific needs".

    So, an error on Blackberry's part but not a fatal one. They have other things to deal with first.

  • Report this Comment On February 13, 2013, at 10:06 AM, eidsonb wrote:
  • Report this Comment On February 13, 2013, at 10:09 AM, jelp2 wrote:

    I guess you got your answer. :)

  • Report this Comment On February 13, 2013, at 11:58 AM, eidsonb wrote:

    Well hello again @infothatblows...see you are still spreading lies and misinformation about your former employer. BB10 does have a voice assistant and her name is VIKI. And before you say that is a copy of Siri...you should research your science fiction a bit....

  • Report this Comment On February 13, 2013, at 12:20 PM, eidsonb wrote:

    Well at least you spelled it right this time...and where in my post do I claim that BB owns Siri?? Stretching the truth again I see...

    You and Marcap and JamesApple are all the same person right??

  • Report this Comment On February 13, 2013, at 12:23 PM, eidsonb wrote:

    And I do believe the correct wording is "..Blackberry does not have anything like Siri which is fluent in Japaneses..." but whom am I to say anything about anyone elses grammar.

  • Report this Comment On February 13, 2013, at 12:46 PM, eidsonb wrote:

    My eyes are blue thank you very much...and its called HUMOR since all three of you say teh exact same thing time after time...you should try it ever once in awhile....

    That article that you linked to is for the DEV devices and not the production ones. There are many videos that show how VIKI works and it more than holds it own against Siri and is better is some areas.

  • Report this Comment On February 13, 2013, at 1:48 PM, greenember wrote:

    The article omits the part of BBRY's response where they said no plans "at this time". They never said that they wouldn't ever re-enter the Japanese market. It's smart of them to focus their limited resources in areas where their market share isn't listed as "Other". And to be clear, BB10 has Japanese display support, but no Japanese input support. There's a slight difference, but it's worth noting if you're trying to write an accurate article about the situation. IF...

  • Report this Comment On February 13, 2013, at 2:15 PM, cbglobal wrote:

    Go outside North America and you will be hard pressed to find many things that are American made. LOL! And you talk about BB.

  • Report this Comment On February 13, 2013, at 3:40 PM, eidsonb wrote:

    @info you are one angry little man...you are the one who needs help...you have SERIOUS issues dude....

  • Report this Comment On February 15, 2013, at 11:01 AM, sonbuster wrote:
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