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BleakBerry: The gloomy outlook

Tom Paye | Sept. 4, 2013
A new survey paints a bleak picture for the future of BlackBerry, with many current BlackBerry users exploring their options for a new mobile platform.

It all seemed so positive at BlackBerry Live in Florida earlier this year, didn't it? New BlackBerry 10 devices were on the horizon, BlackBerry Messenger (BBM) was going to be made available on other platforms, and BlackBerry Enterprise Service (BES) 10.1 was garnering headlines.

Alas, BlackBerry's management saw their high hopes come crashing back down to Earth this summer, as the new devices missed sales forecasts and the company continued to bleed money. Only 2.7 million phones running the BB10 operating system were shipped in the quarter ended June 1, and according to Gartner, BlackBerry commanded just a 2.7-percent share of the global smartphone market in Q2.

The firm's CEO, Thorsten Heins, hoped to reassure analysts on a conference call after it was announced that the company was looking at strategic alternatives. "BlackBerry 10 is still in the early stages of its transition. In fact, we are only five months in to what is the launch of an entirely new mobile computing platform," he said.

But the analysts weren't fooled, and Bill Menezes, Principal Research Analyst, Gartner, has painted a much bleaker picture of what's happening at BlackBerry.

"We've seen for some time that BlackBerry was struggling. This latest move seems to be the company coming to terms with the idea that its days as a standalone enterprise in its current form are drawing to a close and that it cannot be a viable competitor without a significant structural change," he told CNME.

Heins' assertions that BB10 could still yield results aren't soothing many brows, then. It may only be nine months since the operating system was officially released, but Wall Street is impatient and customers are fickle — things like being able to offer a strong app ecosystem needed to happen much quicker for BlackBerry. And while its market share continues to plunge, the likes of Microsoft are moving up in the ranks — Gartner recently said that Windows Phone made up 3.3 percent of the smartphone market during Q2.

Initiatives like making BBM available on Android and iOS are being further scrutinised. And some analysts have called into question the firm's decision to relinquish one of the unique selling points of the BB10 platform. For his part, Menezes believes that the strategy was based on reasonable assumptions, but it's far from clear if the company will see any benefit from it.

"BBM has long been one of the most popular features of the BlackBerry ecosystem; the company is making a reasonable bet that iOS and Android users, once they try it, will flock to BBM instead of the horde of other widely deployed messaging apps, such as WhatsApp or Skype," he said.


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