BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s deal with Taiwan’s Foxconn Technology Co Ltd (TPE:2354) faces the litmus test tomorrow. The Canadian company is gearing up to launch its Foxconn-manufactured low-cost smartphone Z3 in Indonesia this Tuesday. Online bookings began on April 28, and according to retailers, pre-orders have been healthy. Indonesia is one of the last bastions of BlackBerry.
Will BlackBerry’s big bet pay off?
The ailing smartphone maker unveiled the 5-inch Z3 smartphone at the Mobile World Congress earlier this year. The device is likely to be priced in the range of $200. The smartphone has been designed especially for the Indonesian market, but it will also be launched in other Asian countries in coming months. Notably, it will be the first new device from BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) since John Chen took over as CEO of the company in November.
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) believes Z3 will be a success in Indonesia, where a large number of people remain loyal to the Canadian company. A company spokesperson said that Z3 should resonate with consumers. However, analysts believe that it might be too late for the company. Since John Chen was appointed as its CEO, BlackBerry has shown some improvement. The company suffered a loss of $421 million in the fiscal fourth quarter ending March 1, not as bad as some had expected.
Z3 unlikely to revive BlackBerry’s fate in Indonesia
The Waterloo-based company’s deal with Foxconn Technology Co Ltd (TPE:2354) was part of its turnaround strategy. BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) transferred manufacturing and inventory management to the Taiwanese company so that it could focus on software and services. The new Z3 smartphones comes pre-loaded with BBM, which has pictures of Indonesian cartoon characters which users can send to one another.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is also offering a limited edition of Z3 with “Jakarta” engraved on it. Though Indonesia is still one of its healthiest markets, BlackBerry is rapidly losing steam there. Sudev Bangah, a consultant at research firm IDC, told AFP that the company’s market share in Indonesia plunged from 43.3% in 2011 to about 13% in 2013. Bangah doesn’t believe the Z3 can change BlackBerry’s fate in Indonesia.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares gained 2.33% to $7.46 at 1:11 PM EDT on Monday.