BlackBerry deal attempts to keep the company relevant in Indonesia

Indonesia is a major market for BlackBerry. According to the Wall Street Journal, BBM is the top messaging platform in the country with 60 million active monthly users (as of June) in a market with 250 million people. According to Euromonitor International, by 2020 Indonesia will be the fourth largest market for smartphones with annual sales of $1 billion. But the latest "Made in Indonesia" regulations in the country mean that handsets sold in the region need to contain more locally sourced parts.

By next year, 30% of smartphones sold in Indonesia must have local content which can now include software or investments. In 2018, that figure will rise to 40%. This year, the figure is 20%. In order to be able to sell its phones in Indonesia, BlackBerry has entered into a deal with PT Telekomunikasi Indonesia Tbk. That firm is the largest wireless carrier in the country, and will produce, promote and distribute all BlackBerry handsets in the region.

BlackBerry's competitors like Apple have a harder time meeting the local content figure. Having software count toward the local content number does help Apple, and the company is rumored to be building an R&D center in Indonesia next year. Also looking to expand in the country is Xiaomi. A spokesman said that "Indonesia is a strategic market for Xiaomi and we are committed to grow." Lenovo and Samsung set up shop in the country in 2015, and other smartphone manufacturers have found local firms to build and assemble their handsets. Speaking of Samsung, the company had the largest market share in Indonesia as of the second quarter, with 26% of smartphone shipments according to IDC.

In addition to helping local manufacturers in the country, the increase in local content requirements will boost developers in the region. Looking to support the local software industry, smartphones purchased in Indonesia must come with seven local mobile apps pre-installed, or 14 games with at least a million active users.

As the smartphone manufacturers jostle to get in position to meet the "Made in Indonesia" regulations, BlackBerry's deal with PT Telekomunikasi Indonesia Tbk could go a long way toward keeping the country one of the few markets where BlackBerry is a relevant presence.

source: WSJ