Ronnie05's Blog

Blackberry: Needs to build back relevance again

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 2, 2010

RIM, maker of the Blackberry range of handsets, which so long had a traditional stronghold in sales to American companies is beginning to loose out its edge. Apple said last week that more than 80 percent of the Fortune 100 companies were testing or deploying its iPhone. Meanwhile, phones using Google’s Android operating system appear to be making inroads, too. That spells trouble for RIM. Apple and Google’s dominance in apps means they are becoming de facto standards in the smartphone market.

Earlier, corporations and consumers used to be happy with handsets that served up e-mail reliably, promptly and securely. RIM’s products do this very well. However now, Android and Apple handsets adequately handle e-mail, and also doing much more. For instance, iPhone users can download about 30 times as many apps as are available to BlackBerry users, and the process is more user-friendly.

RIM’s share of the American smartphone market reflects this shift. It fell to 41 percent in the first quarter from 55 percent in the previous year, according to Gartner. The combined share held by iPhones and Android handsets rose to 49 percent, from 23 percent over the same period.
While, RIM’s sales in overseas markets are increasing, enabling it to hold its share of the global smartphone market more or less steady but the loss of market shares in US markets is a worrying trend.

Moreover, RIM’s overseas push has been accompanied by a sharp fall in the average price of its handsets. While phones are priced differently overseas, the suspicion is the company is losing pricing power. From the Nokia example, the decline in its stock price, shows that increasing volume doesn’t matter if prices fall too fast.Technology companies that lose such wars often suffer shockingly fast profit declines. RIM still has a two aces. This fall, it is due to introduce a new operating system, which might help it fight back. But time is running short. Similarly, the Blackberry Blackpad will test RIM’s ability to build a great touch experience.

It remains to be seen whether RIM can maintain momentum with a never-ending stream of Android devices (HTC Evo, Incredible, Motorola’s Droid X) and Apple’s iPhone 4). RIM is launching new phones amid tough competition. Toss in the fourth quarter launch of Windows Phone 7 devices and it’s a crowded field.

RIM is expected to release a slider smartphone along with AT&T tomorrow which is expected to feature Blackberry’s new OS. It remains to be seen whether RIM can maintain momentum with a never-ending stream of Android devices (HTC Evo, Incredible, Motorola’s Droid X) and Apple’s iPhone 4. RIM is launching new phones amid tough competition. Toss in the fourth quarter launch of Windows Phone 7 devices and it’s a crowded field.

However, it is widely believed that developer community support may be the key to RIM’s success. Early developer support could help boost consumer confidence in the device/platform. The problem is that Developers have already flocked to the iPhone and Android platforms. RIM is playing catch up on multiple fronts. With smartphones all about software and UI, RIM completely rebuilt its web browser using the same open-source WebKit layout/rendering engine as iPhone/Safari and Android/Chrome, and given the importance of touchscreens, needed a UI rewritten expressly for touch, as opposed to just jamming its legacy keyboard/cursor-based OS into the Storm.

The QWERTY slider could be a game changer along with Blackberry OS 6.0 version could turn to be a game changer for RIM and if it flips back could mark the beginning of the end for RIM.

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