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BlackBerry 10 is “last roll of the dice” for RIM

Michael Garwood
January 30, 2013

BlackBerry manufacturer RIM will today (January 30) unveil is much delayed BlackBerry 10 operating system – but analyst remain unsure if it will be enough to save the ailing firm

In 2013, RIM lost considerable market share to rivals Apple and Samsung in both the business and consumer market over the past year – and has been forced to downsize its business resulting in 3,000 job cuts globally.

The firms UK and Ireland MD Rob Orr recently told Mobile News, that 2013 will be the most significant year in its history – something analysts concur with.

Principal analyst at Informa Telecoms & Media Malik Saadi said BlackBerry is no longer seen as a premium brand – and the key to any success will be based purely on the experience offered by BB1O.

“The BlackBerry brand continues to lose its luster and RIM is now relying on its BB10 platform, which it has developed from scratch, to regain consumer confidence in its brand. The success, or otherwise, of the first device powered by the new platform will determine RIM’s future.

“In developed markets, BlackBerry is no longer perceived as a premium brand and subscribers in these regions have deserted the platform in their masses due to the lack of attractive devices. In 2012, the company sold fewer than 14 million BlackBerry phones in Western Europe and North America combined.

“However, RIM could well win these users back if it can offer them a premium user experience in line with the quality of its services, notably its BBM messaging platform and its e-mail services. And this is exactly what RIM is trying to achieve with the introduction of the BB10 platform.”

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Saadi added: “The challenge RIM faces is not so much related to the device’s performance or its appeal but is more to do with how consumers will react to its brand new approach to the user experience.

“No doubt it will be challenging for RIM to push the new device to consumers in retail stores. Sales representatives often prefer to sell as many phones as quickly as possible, preferably  ones that don’t require too much effort in educating the consumer.

“RIM should aim to sell at least 1 million units of the new device in the first quarter after its launch. Anything below this would call into question the company’s ability to execute its marketing strategy while anything above 3 million units would be a spectacular performance, which will undoubtedly resurrect both the consumers’ and the investors’ confidence in the BlackBerry brand.”

No hope

Ovum chief telecoms analyst Jan Dawson says the new OS may only provide RIM a temporary boost and will only delay a “natural end” to the firm.

“RIM continues to face the twin demons of consumer-driven buying power and a chronic inability to appeal to mature market consumers.

“Despite the brief bump RIM will see from the launch of BB10, we expect its decline to continue longer term. At its peak, RIM shipped between 12 and 15 million devices per quarter, but there is no way it can hit this number on a sustainable basis once the BB10 launch filters through. Though the new platform should have significant appeal to existing users, we don’t expect it to win significant numbers of converts from other platforms. There is little in the new platform that suggests it will have the compelling apps, content stores, or the broader ecosystem that consumers have come to expect in a competitive smartphone platform.

“There is nothing in what we’ve seen so far of BB10 that suggests it will conquer the second of these demons, and the first is utterly out of RIM’s control. We don’t expect a speedy exit from the market; with no debt, 80 million subscribers and profitability in the black in at least some recent quarters, the company can continue in this vein for years. But its glory days are past, and it is only a matter of time before it reaches a natural end.”

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