These are tough times for BlackBerry. The Canadian company has hung a “for sale” sign over its global business, announced a recent US$1 billion loss over a three-month trading period, and is subject to a controversial “rescue” takeover bid from one of its existing shareholders.
Meanwhile, its share of the global smartphone market continues to dwindle in the face of heavyweight competition from Apple and Samsung.
Some analysts say BlackBerry, once the mobile brand of choice for everybody from investment bankers to streetwise teenagers, is in terminal decline.
But that is not how Nick Horton sees it from the viewpoint of Dubai Internet City, where he runs BlackBerry’s Middle East and North Africa business.
“There have been lots of distractions because of the global situation, but we’re putting in a strong performance in the Middle East and we remain focused on it. It’s definitely a three-horse race here,” he says, in reference to the company’s big two rivals from the United States and South Korea.
He reels out statistics to back up his belief, such as the annual survey of the UAE's Telecommunications Regulatory Authority that states BlackBerry had two of its devices in the top 10 sellers in the Emirates.
Another industry survey, by the German market research agency GfK, puts BlackBerry at number three in the UAE and the broader region, but at number two in the big Saudi market.
BlackBerry apps have proved to be particularly popular in the UAE and Saudi Arabia, Mr Horton says. “BlackBerry is bigger than Apple in many parts of the region. We’re competing strongly,” he says.
Why is BlackBerry, to some degree, bucking the global decline with its Middle East business?
“People here are very brand-conscious, and BlackBerry is still a significant brand that appeals across the region. In particular, BlackBerry Messenger [BBM] appeals to the social nature of consumers in the UAE and across the region, and will prove more popular when it’s available on Android and iOS systems,” he says.
There is no date yet for BBM’s launch on these systems, used by its main rivals, after technical problems delayed an earlier start. But BBM has proved to be one of the enduring features of BlackBerry’s popularity in the region. In the UAE, 98 per cent of all BlackBerry customers make use of the free messenger service.
The focus in the region is three-dimensional, Mr Horton says. First, to continue to exploit BlackBerry’s traditional customer base at the top end of big corporations and financial institutions, what it calls the “enterprise segment”.
That requires persuading IT departments at these big firms to upgrade to the new BB10 system launched this year and to supply new handsets to employees.
The second focus is known as the “bring your own device” market – BYOD in telecoms jargon. This has been a problem for BlackBerry elsewhere in the world, with big Wall Street banks, in particular, increasingly allowing employees to make their own choice of smartphone, which in the US usually means an Apple device.
“We don’t have any specific details on BYOD in the region, but we do know that existing customers are upgrading to BB10 on the BlackBerry Enterprise Server, our corporate service,” he says.
He also says that big UAE customers like Emirates NBD, Emirates Airline and Dewa have upgraded to BB10 or are considering doing so, as well as other big regional names like Saudi Aramco and Qatar Airways.
The third focus is that part of the consumer market that “values productivity”, as Mr Horton explains it, “from the chief executive to the student, people who want to use BlackBerry productively”.
Regardless of what is happening back in its Ontario HQ, Mr Horton – just a month into the Middle East job after some years running South East Asia operations from Singapore – has plenty to keep him busy.
The new Z30 device launched recently and will be heavily marketed at the imminent Gitex exhibition in Dubai; BlackBerry is preparing for its sponsorship of the Mercedes team at the Abu Dhabi Grand Prix; and the Canadian singer Alicia Keys, a “global creative director” for BlackBerry, will be performing in Dubai later this year.
Some analysts would question whether BlackBerry will still be around as a independent entity for these events. A takeover bid by its 10 per cent shareholder Fairfax Financial remains at the stage of “due diligence”, but the bid faces problems. Simultaneously, the BlackBerry board under chief executive Thorsten Heins is conducting a strategic review that many believe will end up in the sale or break-up of the company.
Esprit de corps at BlackBerry took a knock recently with the announcement of 4,500 job cuts. “None have taken place in the Middle East yet, but we cannot rule it out,” says Mr Horton.
His job now is to keep the Middle East operation working smoothly despite the volatility and controversy elsewhere.
“It’s a management challenge, making sure we retain strong relationships with our partners and stakeholders. The stuff being written elsewhere is a distraction. But there are lots of positive things happening in the Middle East and we will continue that story.”
fkane@thenational.ae
'The Lost Daughter'
Director: Maggie Gyllenhaal
Starring: Olivia Colman, Jessie Buckley, Dakota Johnson
Rating: 4/5
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Where to submit a sample
Volunteers of all ages can submit DNA samples at centres across Abu Dhabi, including: Abu Dhabi National Exhibition Centre (Adnec), Biogenix Labs in Masdar City, NMC Royal Hospital in Khalifa City, NMC Royal Medical Centre, Abu Dhabi, NMC Royal Women's Hospital, Bareen International Hospital, Al Towayya in Al Ain, NMC Specialty Hospital, Al Ain
DUNE%3A%20PART%20TWO
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Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
You Were Never Really Here
Director: Lynne Ramsay
Starring: Joaquim Phoenix, Ekaterina Samsonov
Four stars
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
