Blackberry’s bumpy road back

The BlackBerry 10 platform launch is just the beginning; BlackBerry now needs to wrest control of the market from Apple and Google.

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Blackberry’s bumpy road back BlackBerry is hoping to wrest control of the market from Apple and Google after the Z10 launch.
By  Stephen McBride Published  March 16, 2013

The BlackBerry 10 platform launch is just the beginning; BlackBerry now needs to wrest control of the market from Apple and Google. The smartphone maker has an uphill struggle to regain lost market share, writes Stephen McBride.

The global smartphone market hit an extraordinary growth spurt in 2012, according to the International Data Corporation’s (IDC) Worldwide Quarterly Mobile Phone Tracker report for the fourth quarter of 2012. Shipment volume was 36.4% greater than in Q4 2011 and new players entered the top-five market-leader table.

Unfortunately, Canadian BlackBerry maker Research In Motion was not one of them. The company was beset by a number of problems last year, including service outages in the UAE and other parts of Asia and a delayed launch of its Blackberry 10 platform. But while many analysts - citing these mishaps and a lack of developer interest - consigned the BlackBerry handset to history, RIM’s story may be far from over.

At last month’s launch of the BlackBerry 10 platform, RIM - now to be called “BlackBerry” after its products - presented two new handsets: the touch-interface Z10 and the Q10, which incorporates a touch screen and the QWERTY keyboard that charmed BlackBerry’s 80 million subscribers globally.

The Z10 in particular is clearly intended to be a consumer curio, with its large media-friendly screen. This appears to be slightly at odds with commentators such as Ovum’s chief telecoms analyst, Jan Dawson, who believed that the new platform would seek to keep the subscribers BlackBerry already had, rather than trying to prize consumers from the grasp of Android or iOS. Dawson argued that since company revenues were increasingly split in favour of the corporate segment, that the manufacturer would not waste effort trying to win back the consumer market.

However, even Dawson conceded that BlackBerry enthusiasts have been treading water in anticipation of a delayed platform, and shrunken revenues are likely to recover for at least the first two quarters of 2013, as those loyalists finally snap up the latest devices.

Following the launch the analysts’ buzz appeared to be cautious optimism, with Peter Misek of Jefferies & Co saying the new handsets put BlackBerry “back in the game” and Carl Howe, vice president of Yankee Group commenting that the Z10 device “stacks up well against iPhone and Android devices”.

Such comments indicate an industry impression that BlackBerry is now reaching out to the consumer market, a market that analysts and industry veterans know to be app hungry. Enter Alec Saunders, BlackBerry’s app evangelist who has spent 48 of the past 52 weeks on the road, visiting all corners of the globe in an effort to drum up developer interest in the new platform.

“Development sentiment is crucial,” Saunders told CNet. “Developer interest is a leading indicator of success for any platform in this sector.”

BlackBerry is pushing the message that BB10 is completely fresh. Saunders’ efforts have led to a massive 70,000 apps available at the time of launch, according to CNet. This constitutes a record for a new platform (Android only managed 50 at launch), but still lags behind the current levels of hundreds of thousands available through Google Play or Apple’s App store.

While apps are an undeniable factor, another will be the retail cost of the handsets. The most notable new player in IDC’s Tracker data is Huawei, which is building its Ascend range to compete at lower price points. This strategy, similar to the one employed by Samsung, diversifies a product range, rather than taking a premium-only approach. This is particularly important since industry pundits are, almost with a single voice, lamenting the saturation of the high-end segment and pointing to less affluent emerging markets as the battleground of the future.

“If RIM is to target the same audience in these emerging markets, the new device should not be priced higher than $250, which is highly unlikely,” said Malik Saadi, principal analyst at Informa Telecoms & Media.

His prediction was correct. BlackBerry has announced a retail price for its consumer champion model, the Z10, of AED2,599 ($707). 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 Z10 price signifies its intent to do battle with Android and iOS for existing premium smartphone users. To do this, device, platform and app suite will have to have a combined wow-factor that is beyond anything yet on the market. The industry will be watching.

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