BlackBerry 10 not a game changer: Ovum

Industry analyst argues RIM strategy will not win platform converts

Tags: Research In Motion
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BlackBerry 10 not a game changer: Ovum Platforms other than Android and iOS battled for an 8% slice of the market in Q4 2012.
By  Stephen McBride Published  January 29, 2013

As RIM prepares for tomorrow night's launch of its BlackBerry 10 operating system in Dubai, analysts continue to cast doubt on the new platform's ability to pull RIM back from its prolonged slump.

Recent Strategy Analytics figures show a 2013 Q4 smartphone industry in which systems that are not Android or iOS, battle for a meagre 8% of the global market.

BlackBerry's business has become increasingly corporate-focused as a greater share of its revenues comes from this segment. As a result Jan Dawson, chief telecoms analyst at Ovum, believes BlackBerry will see a welcome bump in revenues as loyal customers - whose wait for the BB10 upgrade has led to RIM's flagging sales - finally make purchases, but after the first half of 2013, this interest will abate.

"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," Dawson said.

"Both of these have depressed sales for RIM's devices, and neither is going away. The first of these phenomena is unstoppable, and we expect 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. The second trend could be stopped in theory, but RIM does not seem to be focusing on this approach in BB10."

Dawson believes RIM's focus is on keeping the 80 million subscribers it has rather than taking risks on a paradigm shift that might push those subscribers towards iOS or Android.

"As part of our research for a newly published profile on RIM's smart device strategy, it became clear to us that RIM's intention for BlackBerry 10 is to be ‘the best BlackBerry for BlackBerry users' rather than something that will necessarily win converts from other platforms," he said.

"The points of differentiation RIM has focused on in teasers for the new platform confirm this - better multitasking, productivity, email, contacts and calendar applications and so on, rather than a better gaming, content consumption or social networking experience.

"Despite the brief bump RIM will see from the launch of BB10, we expect its decline to continue longer term. At its peak, RIM shipped between 12 and 15 million devices per quarter, but there is no way it can hit this number on a sustainable basis once the BB10 launch filters through."

Dawson mentioned openings in emerging markets, which are less saturated, and where BlackBerrys constitute a status symbol as they once did in mature markets. However, he said that BB10 will sit on devices that cannot be realistically delivered to such markets at a low enough price point to generate consumer interest.

"In all, RIM continues to face the twin demons of consumer-driven buying power and a chronic inability to appeal to mature market consumers," Dawson said.

"There is nothing in what we've seen so far of BB10 that suggests it will conquer the second of these demons, and the first is utterly out of RIM's control. We don't expect a speedy exit from the market; with no debt, 80 million subscribers and profitability in the black in at least some recent quarters, the company can continue in this vein for years. But its glory days are past, and it is only a matter of time before it reaches a natural end."


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