Snippets: Blackberry’s share prices fall below its book value

RIM has eroded 80% of its m-cap in the last 3 years and its product line has wilted under relentless attacks from Apple and Android.

Research In Motion Ltd. has declined below book value for the first time in nine years leaving the BlackBerry maker worth less than the net value of its property, patents and other assets in a sign of investors’ lowered faith.This follows Blackberry’s losses in the U.S. smartphone market share. Blackberry Market share sank to 9.2 percent in Q3, 2011 from 24 percent a year earlier as consumers opted for Apple’s iPhone and Android phones from Samsung Electronics Co. and HTC, according to research firm Canalys.

This leaves Blackberry with a $9.82 bn market cap and a prime subject for acquistion if so be be desired.

Read Earlier Posts
Past Perfect, Present Tense, Future Unsure (Part III, Part II, Part I)
5 Reasons for the Blackberry Slide

Android accelerating on Smartphone space

Canalys has stated the obvious in terms of smartphone platform market shares: Android rules and has captured 48% of the smartphone market in Q2 of 2011. Smartphone adoption continues to grow rapidly across the world, reaching a total of 107.7 million units shipped in Q2 of 2011, a 73% year-on-year growth.Android was the biggest driver of smartphone shipments in Q2, as Android-based smartphone shipments were up 379% year-over-year, coming in at 51.9 million total units shipped.Successful Android-based products from vendors such as Samsung, HTC, LG, Motorola, Sony Ericsson, ZTE and Huawei, as a catalyst for the platform’s growth. As written about earlier Apple has over-shot Apple and is the No.2 smartphone platform. Android’s growth has powered Samsung as the No.2 smartphone maker globally.

Android was the number one platform in 35 of the 56 countries Canalys tracks, resulting in a market share of 48 percent. Nokia’s leadership position has proved most resilient in key emerging markets, and it still leads in the BRIC countries: Brazil, Russia, India and China. The problem for Nokia is that demand for its Symbian-based smart phones has dissipated very rapidly, particularly in operator-led markets, such as Western Europe, where it’s been strong in the past. It badly needs the first of its Windows Phone devices to launch as soon as possible to arrest a decline and, hopefully, silence its critics.Even while Nokia-WP tie-up was announced in February, the first of these devices will be launched only towards end of 2011.Nokia is set to have several more difficult quarters before a possible reversal of fortunes.

RIM had a challenging quarter in North America, with its market share slipping to 12%, down from 33% a year ago. However, Blackberry continues to see significant interest and uptake of its devices, for example in Indonesia and South Africa where it is the leading smart phone vendor. Nonetheless, it must continue to innovative and recapture lost momentum. It’s critical that the next-generation BlackBerry OS 7-based products launch ahead of the upcoming holiday season to compete in the market.

Blackberry’s choices!

Continued from earlier posts: Blackberry: Past Perfect, Present Tense and Future Unsure Part 1, Part II, Part III and Reprise

RIM has eroded 80% of its m-cap in the last 3 years and its product line has wilted under relentless attacks from Apple and Android.

So what then are the choices that RIM has?

Blackberry has to do a fundamental re-think of its device portfolio. In an age where push email takes a back seat to navigating by swiping on the screen, streaming rich video on a phone, and perusing application stores with tens of thousands, and even hundreds of thousands, of apps, RIM finds its device has been knocked clear of the limelight. The Bold didn’t work and the Torch didn’t light up sales either. the Blackberry Playbook also isn’t as refreshing. In an age where Apple and Android have been leading by innovation, BB is increasingly seen as a One trick pony.

Interestingly, quite a lot of other factors paint a completely different picture of BB. Revenue is nearly triple where it was in early 2008 and profits are up 250% from the same time period. They are gaining distribution as they move into new markets as well. This looks like a company on the rise with a bright future. On the other hand, Market share is down, the Playbook launch hasn’t been noteworthy, and the company is planning layoffs. RIM has to see thru the dichotomy clearly.

QNX platform, the BB equivalent of iOS and Android is due release in 2012, but getting delayed due to lay-offs and other issues. It will not be a bad idea for BB to consider an Android fling if QNX doesnot work out. That could be the plan B

While RIM still has good sales today, it finds itself more closely identified with HP’s webOS, Windows Phone 7, and Nokia, in that the world passed it by and now it’s trying to catch up. It may have stuck with the current platform too long though, thinking that rising revenues and profits meant it was on right path. Recently announced measures may be too little, too late.

Blackberry: Past Perfect, Present Tense and Future Unsure (Reprise)

Continued from earlier posts about the Blackberry slide. Read the posts: Part I, Part 2 and Part 3.

Apple and Android are squeezing and muscling Nokia and Blackberry out in the war of platforms/smartphones. Earlier this month Nokia sounded its profit warning and was unable to put a number to its quarter earnings through the rest of the year. Blackberry followed suit after it reported earnings of $695 million on sales of $4.9 billion compared to financial analyst estimates of $5.15 billion in sales. RIM shipped 13.2 million phones. Shares for the company fell nearly 23 percent to $27.19 (Contrast this with $140 share price in 2008). RIM now expects to make a EPS of $5.5-6 against an expected $7.This current second quarter, which ends in August, will showcase the continuing decline for RIM. The company is calling for sales of $4.2 billion to $4.8 billion.

According to ComScore, Android commands 36 percent market share, with Apple’s iPhone grabbing 26 percent. RIM is at 23 percent and falling.The shortfall in the United States is primarily related to the age of the BlackBerry portfolio. Android faces a pincer tong attack by Apple at the the top end of its portfolio and by cheap Androids at the bottom end of the portfolio.

Even when BB believes that its OS7.0 will be instrumental in turning the course, analysts and geek boys dont give BB a chance against iOS and Android. Product delays and overhead/headcount cuts are having a deleterious effect on RIM’s forthcoming QNX-based super smartphones intended to give the iPhone and Android handsets stiff competition.While new products in the fall should help,they will not be enough to stabilize share loss vs. faster moving competitors. RIM’s new BB Playbook has not cut the ice with the iPad fan-boys and is not expected to enthuse and excite unless RIM initiates huge price corrections which will impact the bottom-lines in a negative manner.

Blackberry: Past Perfect, Present Tense, Future Unsure (Part III)

Continued from Earlier post.

Contemporary OS and interface apart, BB has another couple of things to be worried about majorly in 2011. The lack of a 4G Handset to complement 4G launches happening across operators in US and the handicaps in Playbook, its tablet.

The problem for BB doesnot just stop at the BlackBerry smartphone platform, their OS quagmire and how it competes with Droids and iPhones. While iPhone 4 and Droids/EVOs exhibit capability of 4G which would hence complement the LTE rolls outs that operators are investing in, LTE Blackberry phone is still in a very early development process. Lack of an imminent BB LTE offering in 4G space, which is expected to drive enterprise business and adoption could provide the opening for the Androids and iPhones to penetrate such markets and get a head start over BB.

BB’s most interesting product today is the Playbook Tablet. It generated a huge amount of interest in the CES and as a first attempt Playbook is super impressive and QNX makes the cut. However, the Playbook also has a few challenges that could play spoiler
• The current SDK doesnot do a lot of developer stuff. Hence developers would have to wait for a date closer to launch for platform readiness. That delays the developer bit.
• Secondly, the Playbook would launch after the launch of Android 3.0 and iPad 2, both second generation tablets which means more refined behavior and lesser glitches.
• Thirdly, it doesn’t help that the PlayBook absolutely requires a BlackBerry to be wirelessly tethered to it in order to do native enterprise email. A BlackBerry smartphone tethered to the PlayBook for required email support is practically a boat anchor.

RIM’s challenge now is to keep delivering on the needs of the enterprise while at the same time packing the BlackBerry with the sexiest features that will truly drive end-user interest. If it doesn’t do this well, RIM is likely to lose share and ultimately become no more than a footnote in the mobile market that it helped create and define a decade ago.

The leader in the US smartphone space is now trailing the challengers by a heavy distance and worse, it doesnot seem to have its act under control from a future perspective. From the early signs, RIM and the BlackBerry due for some bumpy weather in 2011

Blackberry: Past Perfect, Present Tense, Future Unsure (Part II)

While the earlier post, was a study in factors that led to the slide in BB, this post examines the efforts made by BB towards a more consumer centric product approach.

While Torch was BB’s best effort till date at consumers, BB’s consumer technology compares poorly to other companies’ end-user-focused devices. RIM’s application marketplace trails Android and iOS by several orders of magnitude, and the overall consumer experience is far less polished than the competition.

RIM must find ways to evolve its platform to be more competitive with changing user needs. While recent acquisitions show that RIM is slowly picking up some of the parts that it needs, such as a new kernel and better Web technology, it will need to accelerate the process of integrating those features into a new operating system — as well as a more coherent marketing campaign to better explain RIM’s offerings. To that extent, the QNX OS that BB has introduced in its Playbook tablet is somewhat at par with the expectations in the market. It had to be because tablets are quintessential consumer devices. BB stepping into this space may give the category some shades of enterprise.

Ideally, RIM needs to transition to a new platform entirely rather than attempt to evolve its current offerings. If a modern platform suddenly became available for sale that RIM could use to leverage its core strength, while providing new features, it would be wise to become a bidder. Otherwise, the BlackBerry might become a bit of nostalgia, eclipsed by later entries that were more capable for today’s growing needs. The leaked out features and specs of the 2011 Blackberry, which include the Bold 3 and the Torch 2 have been pretty average on specs and BB 6.0 OS has not really taken the thunder out of the iOS and Android numbers.

Specs: BB Torch 2

Blackberry Storm 3 Spec and Images

Blackberry: Past Perfect, Present Tense, Future Unsure (Part I)

The No 1 smartphone company in US is getting sidelined by competitors who are innovating better and more engaging products for the BB consumers. 2011 may see BB loose the balance to competition in a way that it may never come back into reckoning again. In an earlier post, i had written about the 5 reasons responsible for the BB slide.

Blackberry under pressure: Gartner report shows that while Blackberry has grown over 30% YoY, its still is loosing relevance in the market courtesy Android and iPhone!

RIM is under pressure and it not only about loosing the grip on enterprise solutions, where it continues to be the king though. RIM faces pressure of getting side lined by emergence of categories and consumption patterns that it was not bothered about till a few quarters back.

BlackBerries forever, were known for one thing: instant access to push e-mail and the ability to sync your in-box with your corporate mail, on the go. Over the years, RIM has added calendar and contact sync, Web browsing, color and touch screens. At the heart, though, is the power of push e-mail. The BlackBerry thus remained a one-trick pony, but it does that trick extremely well. Unfortunately, relying on that trick is not going to be enough to keep RIM relevant in the market going forward. The problem for RIM is that others have learned to do that trick as well. It took some time, but now Microsoft’s platforms offer tight integration directly to Exchange, which remains the corporate standard for e-mail. In addition, by licensing the Exchange ActiveSync protocol, Microsoft has given vendors such as Nokia, Palm, Apple and others the ability to offer that core wireless personal information management functionality.

So the move has been from RIM’s best-of-breed management capabilities, tight security and encryption, and the ability to integrate into scores of business applications to touch screens and multi-touch gestures, photo tagging and cataloguing, media and music synchronization, and the integration of social networks. From Enterprise to the consumer underscoring a very important point: When it comes to mobile, it’s not necessarily what IT thinks is important; it’s what the end user thinks. So, while RIM has all enterprise features on its side, end users are starting to demand the sorts of smartphone features they can find on new and flashy devices that run iOS and Android, putting pressure on IT to allow those devices into the organization as a corporate standard. Apple and Google, while wooing the mass market, have made huge strides in adding more business-required support, positioning them-selves to capture the hearts and minds of both the business user and the consumer, who in many cases are one and the same.

Users’ mobile expectations have evolved. Communication is still what consumers want most from a mobile device, but now they expect the ability to reference information, browse the Web, consume entertainment and play games. It’s with these functions that RIM’s platform starts to severely show its age. BBs browser and app store experience is pathetic and I could seriously vouch for that, now that I carry an enterprise BB on me.

To be Contd.

5 reasons for the Blackberry Slide

About 18 months, Blackberry had an unassailable lead in the US smartphones. An year later, Blackberry was being challenged and within a month or two, serious competition was snapping at Blackberry’s heals. This post examines a few factors behind the fall of Blackberry!

A recent report by Strategy Analytics, puts Apple ahead of Blackberry in terms of devices shipped globally over Q3,2010.Global smartphone shipments surged 78 percent to reach 77 million units in Q3 2010. Apple was the star performer, as it overtook Blackberry and closed the gap on Nokia. The report mentions that Blackberry is still handicapped from the lack of touch devices in its high end consequently its global smartphone marketshare has edged down from 20 percent to 16 percent during the past 12 months.

The 5 reasons that led to the slide at Blackberry are as follows:

1. Blackberry made its mark by being a device of choice for enterprises. However, if latest reports are to be believed iPhone and iPad (In particular) are finding traction at the enterprise segments. Interesting Apple never made these devices with enterprise usage in its perspective. Verizon and AT&T are beginning to sell the iPad in their channels and this could upset the balance for RIM in the enterprise segment.

2. The problem for Blackberry has been that after riding the wave of the same OS for longer than usual, they seem to be running out of favour. Carriers, Consumers, Developers and Enterprises have better options available for them from the Apple and Android stables. Blackberry has essentially gone the Nokia way. For long it rode one prized horse without adding anything substantial. Competition out-innovated them.There are plans of refreshing the Blackberry with the Blackberry tablet: Playbook. The Playbook will have a new look-new feel OS designed by QNX which would run the Flash and Adobe. However, without active developer support and a launch date of Early 2011, RIM has seriously lost on developer mind share already.(More about that later)

To make matters a little more complicated for RIM, as against two (Apple & Android) earlier, now they have three for company (Apple, Android & Microsoft).

3. The latest RIM torch bearer, Blackberry Torch has been an effort to bridge the gap between an enterprise device and a high end multimedia smart-phone. However, Goldman Sachs has declared the launch as underwhelming and RIM had to move fast in dropping the price of Torch in order to stay competitive. (RIM lowered prices from $199 bundle with AT&T to $99).

4. Touchscreen continues to be RIM’s Achilles Heal. After two unsuccessful trials with the feather-touch Storm and Storm 2, RIM still has a long way to go in touchscreen devices.

5. If Smart-phones in the future are about applications and the eco-system is about wooing developers,RIM focus has been inadequate in this space largely. The Blackberry Apps store just hit its 10,000 apps online and a Electronista report confirms that the gaming developers community is giving Blackberry a miss. The corresponding number is 100K apps for Android and 250K for Apple. Nlot adequate for the leader in US smartphones, right? Blackberry is trying all out to try and gain developer support

Android Rules Global Smart-phone Forecasts

A day after my initial post of Android’s takeover of Smartphone markets with anecdotal references from Piper Jaffray, Gartner has come up with what they think the OS markets would look like in 2014, which is well… quite close to what many of us possibly know already. I call it massification of the Android and Android’s challenge to the Symbian.

Gartner expects manufacturers such as Samsung to launch many new budget Android devices in 2H10 that will drive Android into mass market segments. Other players, such as Sony Ericsson, LG and Motorola, will follow a similar strategy. This trend should help Android become the top OS in North America by the end of 2010. Might I add to this, that the white label manufacturers from China will be the ones who will take Android to the masses in the Asian and African context.
CSPs/Telcos and mobile device manufacturers alike will need to revisit their platform strategies and balance the need to pursue platforms with the highest current demand against the need to maintain differentiation with unique devices. CSPs/Telcos will likely reduce the number of platforms they offer, to reduce their support costs and clarify their propositions to market.

Gartner predicts that by 2014, open-source platforms will continue to dominate more than 60 percent of the market for smartphones. Single-source platforms, such as Apple’s iOS and Research In Motion’s OS, will increase in unit terms, but their growth rate will be below market average and not enough to sustain share increase. Windows Phone will be relegated to sixth place behind MeeGo in Gartner’s worldwide OS ranking by 2014.

Android to dominate the Smart-phone Future

Within my friends in the telecom industry, it is a common thought that in 2-3yrs time, Android will eventually become mainstream so much so that it will possibly challenge Nokia’s Symbian Leadership in Smartphones. In the same breadth it is expected that Nokia will loose its 40% smartphone market share and fall to around 25%. The same outlook now is echoed by Piper Jaffray who see Android OS aggressively capturing market share in the years ahead.

In a recent study, Piper Jaffray predicts the inevitable dominance of the Android Army beating the iPhone. Android share in smartphones will grow from 14.9% in 2010 to 23.2% in 2012. The Apple in the same time is expected to grow from 15.9% to 17.6%. The loosers: RIM and Nokia because of their lack of core software competency. According to Piper Jaffray, there is little sense for RIM and Nokia continuing to push proprietary software that can’t compete with the market and eventually expect one or both will have to capitulate and move to utilizing third party software.

PJ predicts that ultimately, Android is likely to control over half of the smartphone market in the next five years. Apple’s essentially two phone focus (low price 3GS and higher price 4) will likely limit how much of the market Apple can control and PJ estimates the Apple’s smartphone market share to table out between 20-30%, which still offers significant room to grow.

Android which started out in 2008 and rolled out its first smartphone in 2009, is massifying very handsomely. 2010 has seen Android break some price thresholds to access more and more volumes. Androids earlier were in the proximity of $500 and with some aggressive moves with players like Huawei and Samsung the base prices of Android are beginning to touch $100. We are also beginning to see action at the Chinese white lable manufacturers with the Android and This could be a threshold for Android.

The Big question however is: What after Android? iPhone is a worthy alternate, and would always be exclusive. Is their any other OS which promises as much as the Android. Sadly, there isnt. “Sadly” because, at the going rate Smartphone could become a 50% Android Monopoly which is not good either for the market or for Android.