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BlackBerry enters the last chance saloon

Peter Burrows and Madeline McMahon (via Bloomberg/ SMH) | July 5, 2013
BlackBerry's chances of becoming a viable contender to Apple and Google in the smartphone market are dimming amid lackluster demand for its flagship touch-screen device.

Microsoft cites a growing library of 160,000 apps for Windows Phone devices as evidence of the platform's strength.

"We agree with the industry experts who say Windows Phone has claimed the third spot in the mobile space and is gaining traction," Tony Mestres, a vice president in Microsoft's Windows Phone unit, said in an emailed statement.

BlackBerry announced an addition to the new version of BES called Secure Work Space on June 25 that's designed to manage iPhones and devices from other platforms in addition to its own products. Still, many companies have decided to use independent mobile-management platforms from MobileIron and AirWatch, among others, said Maribel Lopez, founder of Lopez Research.

The Australian Sports Commission recently decided to stop using BES, as fewer employees wanted to own BlackBerry devices, said Chief Information Officer Steve Solk via email.

"Consumer devices based on iOS, Android and even Microsoft have taken considerable market share while BlackBerry seemed to react very slowly to the shift toward consumerisation," Solk said. "It's a bit late to re-evaluate the BES."

Microsoft has its own mobile-management product, called Intune, but provides software tools so companies can use independent systems to keep track of Windows Phone devices, along with iPhone and Android phones, from one software console. BlackBerry refuses to share these tools, called Application Programming Interfaces, said Alan Dabbiere, chairman of AirWatch.

"A lot of companies want to get to one console, but to do that you basically have to turn BlackBerry off," said Dabbiere, who said AirWatch has 8000 customers.

Microsoft has an advantage with mobile-application developers, said Tim Bajarin, founder of Creative Strategies in Campbell, California. More programmers know how to build Windows Phone apps than BB10, which is a based on a new, less familiar technology.

"I see almost zero interest from the serious money in backing BlackBerry apps," Bajarin said. "People are more interested in Microsoft."

One reason is that Microsoft offers money to software makers to write for its platform, said Wade Beavers, an app developer and CEO of DoApp Inc. He said his company stopped designing for BlackBerry about a year ago because it was making so little money because of the small number of people using the platform.

BlackBerry's poor first quarter suggests even bigger losses ahead, said Mike Morgan, an analyst at ABI Research. BlackBerry's margins for the first quarter should have gone up, since the devices built on BB10, such as the Z10, are more expensive and were supposed to be more profitable, he said.

Instead, the company took a loss of $US84 million. "That shows that they don't have room in the business model to just spend more on marketing" without posting more losses, Morgan said.


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