Samsung Looking To Topple RIM

Samsung Electronics and Indonesia ' s Telekomunikasi Selular (Telkomsel) have signed to deal to promote the former ' s Galaxy devices and to spur the adoption of smartphones in the country . Samsung's handsets have proven to be a hit with consumers in developed countries, and we expect the firm to make significant inroads in Indonesia , particularly given the availability of low-cost devices and attractive services.

As of mid-November 2012, Telkomsel has 52.7mn mobile data users comprising Research In Motion (RIM) ' s BlackBerry, mobile broadband Flash and GPRS/PAYU. The mobile operator currently provides services to 18mn smartphones, of which 2mn are Android-based devices. Through the part nership with Samsung , Telkomsel aims to acquire an additional 4mn Android smartphone users by end-2013.

A Positive Sign For Smartphone Makers
Telkomsel BlackBerry Users, 2009-2012

BMI believes that the target is ambitious but not unachievable. Firstly, Samsung Electronics has a wide range of devices for its Galaxy series, which would be able to target a broad spectrum of Indonesia consumers. According to the J akarta Post, Samsung's Galaxy devices are priced from IDR1-6mn (US$104-626). Secondly, Telkom sel, like many of its rivals in the mobile market, is increasing its emphasis on 3G se rvices in order to adapt to changing consumer preference s . Demand for voice services is waning as consumers opt for SMS and other internet-based communication means such as instant messaging. The number of 3G base stations for Telkomsel reached 13,415 in end-September 2012, representing 26.3% of its total, up from 22.0% the previous year, and we expect the operator to continue its aggressive expansion given that 3G services are the next revenue driver. Lastly, the demand for smartphones in Indonesia is experiencing robust growth. Telkomsel reported 5.126mn BlackBerry users at the end of September 2012, up by 68.7% year-on-year.

Indonesia has long been a stronghold for RIM ' s BlackBerry devices. However, RIM is undergoing turmoil globally with significa ntly decreasing demand for its products. The partnership between T elkomsel and Samsung could be expanded to alternative operators such as Indosat and XL Axiata , w hich would prompt RIM ' s decline in Indonesia . In order to sway BlackBerry users, Telkomsel and Samsung have launched a messaging package called ' Chat and Share ' , which is only available on the handset maker ' s Android devices. The package offers integration with social networks Facebook and Twitter , and offers 500MB of monthly data for over-the-top messaging applications such as KakaoTalk, WhatsApp and ChatOn. This looks to mimic the BlackBerry packages o ffered to Telkomsel subscribers, and this could soon trigger a demand surge for Android devices.

This article is tagged to:
Sector: Telecommunications, Consumer Electronics
Geography: Indonesia, Indonesia, Indonesia, Indonesia

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