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Is Research In Motion Ltd (BBRY) Smart to Ignore Japan?

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Call me crazy, but for a struggling smartphone company trying to prove its viability to the world, it just doesn’t seem like a great idea to brush off a nation with more than 126 million potential customers.

Even still, as fellow Fool contributor Dan Radovsky noted yesterday, Canadian smartphone maker Research In Motion Ltd (NASDAQ:BBRY) has confirmed early reports that it won’t release its new BlackBerry 10 devices in Japan.

6 Stocks on Winning Streaks Short Sellers Don’t Believe InIn citing the reasons for giving the cold shoulder to the country, a company spokesperson stated it didn’t qualify as a “major market” for BlackBerry. Furthermore, while the company will continue to support the small existing number of current active users in Japan, BlackBerry representatives also asserted they couldn’t justify the cost of modifying the new operating system to accommodate the Japanese language.

Picking its battles
So what’s the problem with this thinking? Japan remains an enormously strong market with massive sales potential — just not for BlackBerry. According to a COMSCORE, Inc. (NASDAQ:SCOR) report released in August, Google Inc (NASDAQ:GOOG)‘s Android operating system accounted for a whopping 64.1% of all smartphones in Japan at the time, followed by devices powered by Apple Inc. (NASDAQ:AAPL)‘s iOS, which claimed 32.3% of the market.

Unfortunately for BlackBerry, the worldwide smartphone market has shifted even further in favor of Android and iOS since last August. According to the latest report from Canalys released just yesterday, Android devices made up 69% of the 216.5 million smartphones shipped in the fourth quarter of 2012, followed by Apple’s iOS, whose share grew from 15% to an even more impressive 22% following the launch of its iPhone 5. Even so, while BlackBerry CEO Thorsten Heins has admitted his company is fine settling for third place and battling with the less-popular Windows Phone 8 devices, that won’t make competitors like Nokia Corporation (NYSE:NOK) any less formidable.

Ignoring a nation
In addition, according to The Nikkei, the number of smartphones sold in Japan rose to more than 14 million last year, bringing the total number of smartphone users in the country to 24 million. For its part, BlackBerry sold less than 100,000 phones in Japan during the same period, so it’s certainly understandable why it would want to bow out and place its limited focus on stronger markets. However, if BlackBerry management had plans for launching new products in Japan down the road — say, once their latest phones manage to gain traction in other more important markets — something tells me they’ll be fighting an uphill battle to wash away the bad aftertaste this decision has left with Japanese consumers.

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