BlackBerry needs to build off launch, find nicheThursday, January 31, 2013 by: SooToday.com Staff
TORONTO - When BlackBerry CEO Thorsten Heins took the stage in New York and unveiled the devices likely to make or break the rebranded company he stressed it wasn't the final act of a last-ditch effort to save the smartphone pioneer, but rather "just the starting line."
Analysts agree and say the company needs to not only perfectly execute the launches of the Z10 and Q10 BlackBerrys, but must also look ahead to keep apace with its out-sized rivals in the hyper-competitive smartphone industry.
The launch of the BlackBerry 10 operating system, which powers the Z10 and Q10, buys the company some time to boost its sagging fortunes in the smartphone market, said Kevin Restivo, a senior analyst with IDC Canada.
The BlackBerry Z10 is an impressive device — although it doesn't surpass the market leaders — and should appeal to longtime BlackBerry supporters and some customers in the security-minded corporate market, he said.
"It's a quantum leap when you compare the Z10 over its previous BlackBerrys, and as well it should be, if you look at the amount of time that's passed since the last major product launch — the Bold 9900 some 18 months ago," Restivo said.
"BlackBerry now has a much better chance at keeping customers who hung in for this long, there's a higher likelihood that those customers are going to upgrade."
A report issued by IDC in December predicted that BlackBerry would grow its user base in 2013, which was last pegged at about 80 million globally, but would continue to become a smaller player in the market, dropping from a 4.7 per cent share to 4.1 per cent. At its peak, BlackBerry had about 20 per cent of the market.
On Sunday, BlackBerry will air a commercial during the Super Bowl in an effort to build hype for the touchscreen BlackBerry Z10, which went on sale in the U.K. on Thursday. It's available on Tuesday in Canada, and sometime in March in the U.S.
Buying that expensive airtime, which could catch the attention of more than 100 million viewers, is a mass market move designed to sway smartphone buyers from buying an iPhone, Google Android or Microsoft device. The bold decision was well received since the company desperately needs the Z10 and Q10 to do well to stay alive.
But to compete going forward, BlackBerry will likely have to start making some very strategic decisions on how to grow without squandering precious resources on insurmountable challenges, Restivo said.
"It can't be all things to everybody, it's just not big enough and doesn't have the resources, it's going to have to be more selective about the battles it takes with the biggest companies in the world," he said.
"BlackBerry is really going to have to pick and choose a lot more carefully and really be able to differentiate or understand the differences of where it can win vis-a-vis its competitors and go hard in those areas."
It makes sense to aggressively target the familiar corporate market, but BlackBerry 10 won't necessarily be an easy sell, said Mike Battista, a research analyst with Info-Tech Research Group.
"The overwhelming sentiment is it's too late for this, people are impressed but it's not enough," said Battista, noting many companies have already adopted the bring-your-own-device trend and allow employees to use their iPhones for work.
But the BlackBerry Balance feature could be the one key tool that gets corporations on board. It allows IT departments to protect the contents of a work-related section of the phone and open up another section for employees to use off hours. And because BlackBerry has finally released a phone that most users would find somewhat comparable to an iPhone, there might be less resistance to the company's technology.
"That could really set them apart for now because it is unique and a lot of businesses will find that attractive," Battista said of BlackBerry Balance.
"They need to find their niche but even then, I don't know if they'll ever be anything more than niche."
While BlackBerry made major strides in building up its app library the company must work hard in the months ahead to keep convincing top-tier developers to support its platform, Restivo added.
It's not good enough to just manufacture a phone with top-of-the-line hardware, the future of the industry will be based on software and user experience and not technical specifications, he said.
"It's not about device specifications anymore — that's what's really happened during this transition that BlackBerry made — the competitive landscape has changed."