The long and winding road ahead for BlackBerry

  • RIM launches new phones and changes its name, but this will unlikely help it regain its former glory
  • Bring your own device trend, Android dominance and lack of apps the key impediments against it

NEWS ANALYSIS THE dust is settling after the full-of-pomp launch of its latest smartphones, the unveiling of its new software operating system and the name-change from Research in Motion to BlackBerry; still, pundits and analysts are still no closer to answering the question as to whether the company will survive in an increasingly competitive smartphone world.
 The long and winding road ahead for BlackBerry
Ontario, Canada-based BlackBerry unveiled two smartphones – the Z10 and the Q10 – on Jan 31 to thousands of analysts, press members, partners and customers in New York. It also spent expensive airtime on the Super Bowl, the annual championship game of the National Football Association, on Feb 3.
 
The Z10 (pic) is a 4.2-inch full-touch screen-based device while the Q10 is a considerably smaller 3.1-inch screen but is a QWERTY-based (physical keys) handset. Both phones will be powered by BlackBerry’s latest operating system (OS), a proprietary software known as QNX. At launch, BlackBerry claims that both new devices will have access to 70,000 apps in its app store dubbed BlackBerry World.
 
Initial impressions of both the smartphones were mixed as best, with some reviewers praising their well-made hardware and design. Kevin Tofel of GigaOm noted that the Z10 hardware is impressive, has a great display, its software is responsive and its back has a nice texture, making it comfortable to hold.
 
But there are some concerns too, Tofel wrote, noting that two of the biggest challenges were the lack of battery life and apps for the new device, a view shared by Lauren Goode of All Things Digital, who said that the BlackBerry 10 (BB10) boasts of some key apps, but that many big names are still missing.
 
On the OS front, there were some naysayers, namely Jessica Dolcourt of CNET, who noted that while the Z10 has the makings of a classy handset, it’s hampered by its OS flaws.
 
In her initial review, she writes, “In the most important ways, everything comes together: a lovely HD screen, a fast processor, a camera (with tricks!) that's good enough to stand alongside the big boys.
 
“Slip off the RIM-colored glasses, though, and you won't be able to ignore the minor hardware and OS irritations that nevertheless pile up as you use the Z10 over time… For their part, BlackBerry detractors will plainly see a poor iPhone clone that offers little more than the usual features found in any present-day OS worth its salt.”
 
An uphill climb
 
Notwithstanding how the new BlackBerrys perform as a smartphone either with diehard fans or those who have abandoned it for Apple’s iPhone or Google’s Android devices, the broader question for BlackBerry still remains unanswered.
 
Pundits and analysts have observed that for BlackBerry to turn its fortunes around, it would need to do more than just prevent the further slide of its market share but instead win more share from its competitors.
 
In an interview with CNET’s Roger Cheng, S&P Capital IQ analyst James Moorman noted that he believed the new devices will do more to retain existing Blackberry subscribers than to lure new subscribers.
 
Cheng noted there are also lingering concerns that the platform may not have what it takes to cut through the dominance of the Android and Apple's iOS operating systems, which collectively made up 92% of sales in the last quarter.
 
That dominance has led to flourishing application ecosystems, where BlackBerry still lags far behind, he noted.
 
Citing William Power, an analyst at Robert W. Baird, Cheng wrote, “We continue to believe that BB10 faces a daunting uphill battle against iOS and Android.”
 
Jan Dawson, chief telecoms analyst at Ovum, was more damning in his assessment, noting that BlackBerry will get a boost but not salvation from the new BB10s.
 
“Two major factors have worked against RIM in the past two years: Companies are no longer buying the majority of smartphones sold today, and individuals overwhelmingly choose devices other than BlackBerries when they make buying decisions,” he said in a research note.
 
The long and winding road ahead for BlackBerryDawson (pic) said that both of these points have depressed sales for BlackBerry devices, and neither is going away.
 
He added that the first of these phenomena is unstoppable, and Ovum expects a significant increase in employee-led, rather than IT department-led, smartphone buying.
 
“Our recent surveys suggest that even when employees aren’t choosing the device, they expect the replacement for their current BlackBerry to be an iPhone or an Android device,” he explained. “The second trend could be stopped in theory, but BlackBerry does not seem to be focusing on this approach in BB10.
 
The analyst also said that it is Ovum’s belief that Blackberry’s intention is for the BB10s to be “the best BlackBerry for BlackBerry users” rather than something that will necessarily win converts from other platforms.
 
“We can’t fault RIM for wanting to hold onto its 80-million existing subscribers. While exact figures aren’t available, our analysis suggests that BlackBerry has always sold about half its devices to new customers and half to existing customers upgrading to a better phone.
 
“For much of the last two years, the portion bought by upgrading customers has significantly outweighed the portion bought by converts, and this makes it all the more important for BlackBerry to retain existing subscribers.”
 
Consumers not buying it
 
The long and winding road ahead for BlackBerryThe brutality facing BlackBerry was evident a day after the BB10 launch, when it shares slid almost 10%. As of press time, the company’s shares stood at about US$13. Two week before the BB10 launch, BlackBerry shares hovered around the US$14.67 range, one of the highest prices for last year.
 
Speculation was rife that the share price slip had to do with the fact that the Z10 won’t be shipping in the United States until March, while the Q10 (pic) won’t ship anywhere until April. Meanwhile, the Z10 is already on sale in the United Kingdom, and will be available Feb 5 in Canada and Feb 10 in the United Arab Emirates.
 
Further exacerbating BlackBerry’s hopes for a positive comeback is a report by CNET that only one in eight would consider buying a BlackBerry device.
 
Quoting a recent poll conducted by YouGov between Jan 23 and Jan 25, which drew responses from 1,127 adults in the United States, CNET said, “A healthy 47% of consumers were intrigued by certain features found on the new BB10 phones, according to a poll from mobile app developer Bite Interactive. But only 13% would consider buying one, and just 1% plan to get one right away.
 
“Specifically, one in two of those polled said they definitely would not buy a BB10 device, while one in four said they're unlikely to buy one.”
 
Meanwhile in Asia, Reuters reports that India and Indonesia remain crucial markets for BlackBerry but only if it launches more affordable phones, something these two markets have been accustomed to.
 
Citing Melissa Chau, research manager at IDC, Reuters noted, “It's clear that not only are India and Indonesia among the largest markets but in terms of future smartphone growth, they're amongst the ones with the most potential. But the two devices that have been launched are not well aligned to the needs of these two markets.”
 
The report also noted that while BlackBerry’s messenger platform has been pivotal in these countries for consumers to communicate at an affordable rate, the rise of over-the-top messaging rivals such as WhatsApp is changing the picture rapidly.
 
It noted that while BlackBerry remained the No 1 smartphone brand in Indonesia in the second quarter of last year, the most recent period for which rankings were available, Android overtook it as the most popular operating system.

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