Bloomberg News

RIM Plans Middle Eastern Retail Push With Dubai Store

April 11, 2012

A businessman checks his Research In Motion Ltd. (RIM) BlackBerry handset at the Dubai Financial Market trading floor in Dubai, United Arab Emirates (UAE). Photographer: Matilde Gattoni/Bloomberg

A businessman checks his Research In Motion Ltd. (RIM) BlackBerry handset at the Dubai Financial Market trading floor in Dubai, United Arab Emirates (UAE). Photographer: Matilde Gattoni/Bloomberg

Research In Motion Ltd. (RIM), seeking to offset plunging U.S. sales, is preparing to open stores across the Middle East where local demand for its BlackBerry phones has held up better.

The company is in the final stages of negotiating a lease on a flagship store of up to 1,500 square feet (140 square meters) in Dubai, the United Arab Emirates city-state known for its glitzy malls, said Sandeep Saihgal, managing director of RIM’s Middle East business. Stores with local partner Axiom Telecom are planned across the region, he said.

“We’re getting the first one up and running and then we’ll be looking at other cities across the Middle East -- Saudi Arabia, Kuwait, Qatar,” Saihgal said in an interview yesterday at RIM’s headquarters in Waterloo, Ontario, where he was visiting from his base in Dubai.

While Americans are dumping their BlackBerrys for Apple Inc. (AAPL:US)’s iPhone or Android devices, RIM is counting on first-time smartphone buyers across the Middle East, Africa and Asia to choose a BlackBerry. Helped by features like the free instant- messaging BlackBerry Messenger program, shipments in the Middle East and Africa more than doubled to 2.29 million units in the fourth quarter from a year earlier, outselling the iPhone by a margin of 4-to-1, IDC data show.

Africa Next?

RIM’s push into retail mimics the strategy of Apple, which is relying on its own stores around the world in addition to partners to sell its products. In February, RIM said it is planning about 4,000 outlets across Indonesia, including dedicated BlackBerry stores, store-in-stores and kiosks, a “proving ground” for an expansion across southeast Asia.

The Middle East expansion will probably be followed by Africa, with RIM planning flagship stores in markets including Nairobi, Kenya, and Lagos, Nigeria, Patrick Spence, RIM’s global head of sales, said in the interview with Saihgal.

To cater to local tastes, RIM plans to customize the look of its Middle Eastern stores with Axiom, which bills itself as the Middle East’s largest mobile-phone distributor.

“The Middle East is different from Indonesia and what we need to do is a little bit different in terms of the experience we want to deliver,” Spence said. “We’re being very focused in terms of the countries and cities we’re doing it in, based on where the brand is and what we think we need to do.”

RIM rose (RIMM:US) 0.9 percent to $13.05 at the close in New York. The stock has tumbled 76 percent over the past 12 months.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net


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