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January 30, 2013

Fate of RIM Lies In Consumers’ Hands: Analysts

BlackBerry 10 Launches Worldwide Today

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If Research In Motion (RIM) has any hope of staging a comeback, its BlackBerry 10 must resonate with consumers, analysts say.

RIM will unveil its first two BlackBerry 10 handsets today (Jan. 30) in multiple events worldwide.

The two Smartphones are dubbed the Z10 and the X10, according to rumors. The Z10 is to be a touch-screen model, while the X10 will feature a physical keyboard. RIM is expected to launch the Z10 first with devices up for sale in February.

The BlackBerry 10 has been billed as the beleaguered Waterloo, Ont. company’s last chance at redemption. RIM’s devices dominated the market at one time, but have since fallen victim to Apple’s iPhone and devices powered by Google’s Android operating system. With a net loss of $235 million in the last quarter, RIM desperately needs its new Smartphones to be a success.

Jack Gold, principle of J. Gold Associates, believes it is “unlikely” BlackBerry 10 will be a failure “since we already know pretty much what BB10 will look like (based on the PlayBook OS and early ‘leaks’ of devices).”

RIM’s relatively large loyal base of 70 million to 80 million lends the firm a steady stream of revenue, Gold said. That base, combined with his prediction that 20 percent to 25 percent of the business market share will stay with RIM over the next three years as well as a successful BB10 launch may be enough to bring the company back to profitability.

“With a pent up demand for upgrades from its existing base, RIM should get a lift when BB10 is introduced,” he said. “Although it’s never easy to get defecting customers back, a growing sense of displeasure by some past users of BB with other devices they adopted may help RIM succeed. Finally, since RIM sells services along with its devices, and obtains revenues for every device activated on carrier networks, its profitability is more certain (although not completely certain) than others who only sell devices.”

Ovum Chief telecoms analyst Jan Dawson, however, believes the new BlackBerry devices will fail to woo new customers and will see sales mostly from current customers looking to upgrade their devices.

“We believe RIM will see a brief bump in its results during 2013, but that the overall trajectory the company is on will continue its downward slope after that,” Dawson said in a blog post. “In other words, BB10 will provide a temporary boost in performance but no salvation for RIM.”

He said BlackBerry 10 is RIM’s attempt to be “the best BlackBerry for BlackBerry users” instead of focusing on nabbing new customers. He said RIM has focused on better multi-tasking, productivity, e-mail, contacts and calendar applications when they should have placed an emphasis on better gaming, content consumption and social networking experience to attract a new kind of user.

Another setback RIM faces is many consumers are familiar with Apple and Android Smartphones, but not BlackBerry devices, says Ken Dulaney, vice-president of mobile computing at Gartner.

Coming into a retail store, customers will “get a five minute demo of the new BlackBerry 10. And that little demo has to impress them,” he told NetworkWorld.

Dulaney said the differences between the opening screens of iOS and Android devices varies greatly from that of the BlackBerry which does not prominently feature a set of apps or status information as the other devices do.

“The (minimalist start screen of) BlackBerry 10 UI is very gesture oriented,” Dulaney says. “Users may not know what gestures to use, or how to use them consistently. And consistency on phones is very important.”

RIM CEO Thorsten Heins has described the BlackBerry 10’s processing as “closer to a laptop,” while offering a mobile user experience with just the touch of a finger. He also describes the device as sleeker and lighter than its predecessors.

The device is also offer “a large catalog of the leading applications from across the globe and across all categories, including games, productivity, social, lifestyle and leisure, multimedia and published content, as well as applications designed for business and enterprise use,” according to a company press release.

Further details about BlackBerry 10 can be found here.

Today’s BlackBerry 10 launch can be viewed online through RIM’s Newsroom page. It is scheduled to begin at 10 a.m. EST.

 

 

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