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Can BlackBerry Make a Comeback at Microsoft's Expense?

Everything is on the line today for Research in Motion as the company launched its long-awaited BlackBerry 10 at a high profile launch event in New York. The company, which also renamed itself BlackBerry today, launched its first two next-generation smartphones -- the Q10 with its signature physical keyboard and the touch-only Z10.

"It's a new day in the history of BlackBerry," said the company's CEO Thorsten Heins, speaking at this morning's launch. Despite a much-improved app-centric model that looks to build on BlackBerry's reputation for offering real-time and secure communications for enterprises, no one expects the company to lead the smartphone market it pioneered. The best it can hope for is to duke it out with Microsoft for third place.

That's ironic because five years ago -- just months after first iPhone shipped, Microsoft and RIM were jockeying for market leadership -- at least from an enterprise standpoint. Prospects for the iPhone were uncertain at that point and Google's Android was still gestating under the radar. "BlackBerry is the device to beat," the industry analyst Rob Enderle told me at the time.

Fast forward five years and USAToday asked if today's BlackBerry 10 launch is the company's Kodak moment, citing market research forecasts from Gartner that BlackBerry sales will decline 36 percent by 2016 giving it just 1.1 percent share of the market. By comparison, Gartner expects Android to have a commanding 55 percent share of the market, iOS 11 percent and Windows Phone 9.7, according to the report.

Ovum analyst Jan Douglas is also skeptical about BlackBerry's prospects. "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," Douglas said in a blog post. "Though the new platform should have significant appeal to existing users, we don't expect it to win significant numbers of converts from other platforms. There is little in the new platform that suggests it will have the compelling apps, content stores, or the broader ecosystem that consumers have come to expect in a competitive smartphone platform."

Not everyone believes it's game over for BlackBerry. RBC Markets technology analyst Mark Sue told CNBC its forecasting 500,000 BlackBerry 10s will ship in the first month, and the company could sell 10 million units in the first year.

"All their competitors need to be paranoid because if you look at a lot of devices, some of them are looking pretty old," Sue said. "A lot of the designs haven't changed over the last four or five years. Where we see a lot of growth is in the other category this year and I think RIM night have a small chance of opportunity if they execute."

Tech columnist David Pogue of The New York Times was skeptical of BlackBerry's prospects as well but wrote today BlackBerry delivered a new platform and product which didn't have any gaping holes. Because BlackBerry has a new real-time secure operating system, the BlackBerry 10 won't support old apps but the company developed software that can support 70,000 existing Android apps.

The BlackBerry 10 is also designed to appeal to enterprises by giving users one view of their business and personal data, thanks to a feature called BlackBerry Hub. The question raised by Times reporter Ian Austin is whether enterprises will want to upgrade their BlackBerry Enterprise Servers with this new software, which also supports other mobile phone platforms.

The trouble for BlackBerry is, so do many other mobile device management (MDM) offerings on the market. At the same time, BlackBerry 10 allows IT to better secure access to enterprise data from the phone and removing all data if access is revoked, should a device be lost or if the user were to leave the company.

Despite a much improved offering, like others Pogue was reluctant to say BlackBerry will see its fortunes revived. But he did argue the company may not be on the brink. "These days, excellence in a smartphone isn't enough. Microsoft's phone is terrific, too, and hardly anyone will touch it," Pogue noted.

But don't expect Microsoft to let BlackBerry get in its way. It has the cash and marketing might to continue its long battle with the BlackBerry.

With the launch of BlackBerry 10, is it on your short list or are you unmoved by the new offering? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/30/2013 at 1:14 PM


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