BlackBerry is like this Zombie, still walking, but not really alive

So Blackberry had a good quarter and it sold a few Z10s. Good for them. They’re a company that’s been down so long, looks like up to them, but don’t confuse a smidgen of success with a turn-around.

Chances are the surge is nothing more than a short-lived little burst of energy. As Zack Whittaker cleverly put it on ZDnet, they have done little more than “lived to die another day.”

Sure, it feels good to write something positive about a once dominant company that somehow defies the odds and finds its way to profitability, but that’s not what happened here. As Whittaker wrote, “[In spite of the good quarter], the picture was still pretty bleak on the top line, reporting revenue of $11.1 billion, down 40 percent year-over-year.”

That’s a precipitous drop in revenue, folks and even though many including Wayne Rash at eWeek think BlackBerry hit the requisite homerun here with the hardware and the OS, there are fundamental issues with a lack of apps.

I can say personally saw a Z10 at the Mobile World Congress last month and it has style and polish and some very neat OS features that differentiate it from the competition. In short, it was a competitive high-end phone. I walked away impressed.

But what even Rash, who gave the phone a positive review, acknowledged that its achilles’s heel could be its dearth of decent apps. You can have the best phone in the world, but if you don’t have apps, nobody is coming to your party. And that could be a huge issue for Blackberry going forward.

It could be why Larry Dignan reported on ZDNet that BlackBerry is predicted to lose money in every quarter in fiscal 2014 and only survive on its substantial cash horde, a situation that is obviously not sustainable long-term. Of course, it’s worth noting experts predicted a loss this quarter too and they were wrong. Unfortunately, even beating expectations didn’t impress investors all that much as the Wall Street Journal reported the stock dropped 0.08 percent after initially rising 10 percent on the earnings report.

The same WSJ report called a new plan by BlackBerry to distribute a range of phones a risky one. The feeling at BlackBerry is it ultimately can’t compete at the high end of the market with Apple and Samsung, so it’s aiming lower down where it might sell more phones across a range of price points in a wider variety of markets.

Regardless of the plan or the quality of Z10 or the profitable quarter, BlackBerry has been toast for a long time, they just have too much cash to lie down and die. The best they can hope for is that they have set themselves up as a more attractive takeover target.

I know it would be a nice story if they could rise up and compete again, but this isn’t a fairy tale, and no matter how good the Z10 is, it’s not saving the company. It’s too late for that.

Photo Credit:  My name is Randy on Flickr. Used under CC 2.0 license.

BlackBerry might have scored, but the game was over long ago. (c) Can Stock Photo

When BlackBerry released the BlackBerry 10 line of phones today, it reminded me very much of a basketball player who made a basket after buzzer had sounded, the competition was in the locker room and the stands were empty. Nice try, but it didn’t count.

First the good news. These appear to be really nice phones and VentureBeat reports they have lined up all the big names for apps including Skype, Facebook, Box, Evernote and Twitter. They even had the good sense to change the company from Research in Motion, a name that never made sense to me, and officially call the compnay BlackBerry. A name change was overdue, although they might have broken completely with the past and tried something new.

Today’s announcement involved two phones, the Q10 and Z10. The former is a more traditional flat-front glass smartphone without a hardware keyboard, The latter has the external hardware keyboard we are used to seeing on BlackBerry devices. These aren’t your father’s BlackBerry phones though. They are slick and beveled and actually pretty.

And the Z10′s Time Shift Mode feature is a huge differentiator. It’s like a DVR for your camera, letting you shift back in time to get the shot you might have missed by waiting too long. It sounds futuristic and cool, something you don’t normally associate with BlackBerry, although I imagine you need a lot of hard drive space to accommodate that kind of ability. You can see how it works in the short YouTube video below:

The bad news is in spite of getting all the major players to build apps, and coming up with some phones that dazzle, BlackBerry has been in free fall for over three years. It went from a company that controlled more than 40 percent of US smartphone market share in 2010 to an also-ran by the time they made this announcement. By November of 2012, the most recent data available,  comScore was reporting RIM, now BlackBerry, controlled a mere 8.3 percent. That is a precipitous loss of market, and when your brand takes a hit like that, it’s hard to recover.

The company may attract the few advocates it has left, but it’s going to be very difficult to break the iOS-Android stronghold on the market.

And I’m not the only one who thinks so. Adam Leach, principal analyst at Ovum said in a statement that he was also impressed with the platform and the phones, but  essentially, it didn’t matter. “Ovum believes that despite a well-designed Blackberry 10 platform, that will certainly attract short-term interest from existing users the company will struggle to appeal to a wider audience and in the long-term will become a niche player in the smartphone market.”

And BlackBerry isn’t helping itself as FierceWireless reports by delaying the US release until March. When you wait too long to get your updated product to market, the last thing you want to do is get your potential market hyped up and then make them wait 6 weeks. It’s the kind of dumb move that has hurt this company in the past.

I give BlackBerry a lot of credit though for doing what it needed to do. The problem is, they’re about 18 months to two years too late to the game. They made the shot they needed to. But while they stood by the basket with hands thrust in the air, it simply didn’t matter. The game was over long ago.

Just as in baseball when the hot rookie forces out the veteran, the same thing happens in technology when the newest devices force aside once great companies.

As we all know, technology continues to evolve and there’s just no stopping it. It moves relentlessly into the future and you know what? That’s OK, but it means we might be seeing the effective end of once mighty companies. And RIM is a good example of that.

It reminds me in a lot of ways of sports (which is a great metaphor for everything, isn’t it?). For the past month or so we have been watching drama play out in Boston as the old, steady third baseman, Kevin Youkilis, was being replaced by the new young gun, Will Middlebrooks.

Youklis was strong and reliable for a long time. He was a fan favorite, but his production has been dropping and it’s out with the old and in with the new. He was traded to the Chicago White Sox Sunday night, unceremoniously dumped, like yesterday’s Blackberry.

Much like Youkilis, the Blackberry was a good soldier for many years. It served the market well, but newer models came along and RIM simply couldn’t keep up. Now comes word from Uber Gizmo that RIM is considering breaking into two divisions, one that sells handsets and one that sells secure messaging services (because there are still plenty of places that need that kind of service). It’s clear as Uber Gizmo points out that the handset division is doomed to die a quick death, but it’s not clear if the messaging service can survive without a handset partner.

Yet just as injuries have cut into the effectiveness of Youkilis these past few seasons forcing the Red Sox to trade him for a couple low-rate players, an increasingly grim sales picture has driven down RIM’s value, making it a buyer’s market for the once popular service. InformationWeek reported that Morgan Stanley added insult to injury this past weekend when it sent out an investment memo stating that basically, RIM was irrevocably broken.

“We believe the only way RIM remains a viable entity is at a fraction of its current size, a transformation that erases much of its earnings power,” said Morgan Stanley. “The next nine months will likely see rapidly deteriorating fundamentals on the one hand offset by stories of potential strategic options on the other,” InformationWeek quoted the Morgan Stanley memo.

This is a company caught between a rock and hard place, feeling like a rider on a downbound train. They’re on a highway to hell. You get the idea.

But like Youk, that’s OK by me. Why? As much as I liked him as a player, there is a natural rhythm to baseball. The new guys come up and replaces the old ones, and while it’s never easy watching an aging player get forced out, it’s the natural order of things. And it’s the same in business. RIM’s time came and went. The mobile market passed it by and now it’s time to move on.

Kevin Youkilis learned that this week and it’s a harsh lesson that RIM is learning too.

Photo of Kevin Youkilis and Will Middlebrooks by Keith Allison. Used under Creative Commons License.

Blackberry has faced years of steep and steady decline in US sales, but its CEO says there is more to the company than the US market. For its sake, there had better be.

It’s easy to just dismiss RIM as another company that missed the mark when the market changed. That’s because if you judge RIM by its US market share numbers, the situation is pretty dire indeed, but RIM is more than the US market, a fact RIM’s CEO made clear at a press conference this week at RIM’s Blackberry World Conference.

And as we wrote here earlier this week, the market share numbers in the US are seriously ugly. RIM has plunged from 42.1 percent as recently as February 2010 down to just 12.3 percent according to comScore’s most recent numbers. It’s hard to put a smiley face on numbers like that, but CEO Thorsten Heins gave it all he had (as well he should given the condition of his company).

Heins as you would expect, chose to accentuate the positive. As Wayne Rash reported on FierceMobileIT, he made it clear that RIM is doing well in Latin America, Asia and the Middle East selling feature phones, it wouldn’t think of marketing in North America and Western Europe.

That’s all well and good, but as Rash wrote in another piece, Blackberry needs a home run and it needs it badly.

But as Jason Perlow pointed out on ZDNet, it won’t matter how good Blackberry 10 is — because nobody is going to pay attention if the device doesn’t have apps. “Without the developers, you have no apps. With no apps, you can have the sexiest device in existence but nobody is going to buy the thing,” Perlow wrote.

Perlow says that the reason Apple is so successful is that it has come up with the perfect combination of sex appeal on the device side combined with what he calls the Superheroes, the developers who feed the app ecosystem.

And Perlow’s right, if there are no developers, the device will fail. When my wife was looking at a new smart phone recently, she flirted briefly with the Nokia Lumia 900, but in the end she went with an iPhone, partly because she owns other Apple devices, but partly because Microsoft’s app marketplace seemed a little barren.

That’s why apps matter a lot, so it was with some surprise that when I read an exclusive interview on FierceMobileIT with Andrew Bocking, RIM’s senior vice president of software product management, he was practically boasting about the apps for the upcoming release of Blackberry 10.  You may recall that there were a dearth of apps for the Blackberry Playbook tablet when it came out and that was one of the main reasons it has done so poorly.

Yet in this particularly interview, Bocking claimed QNX apps (the OS on the Playbook and upcoming Blackberry 10) had grown 240 percent this year, which certainly sounds impressive, but it’s hard to know, compared to what.  But Bocking didn’t stop there, he predicted that when Blackberry 10 launches, it would have a “substantial” number of apps. He wouldn’t put a figure on that, but he did say it would be more than what Windows had when it launched Windows Phone 7.

Not exactly the best comparison given what I said earlier about Windows Phone 7 apparent lack of apps, but if it’s more, it’s certainly a good start, especially if they are geared toward business users and not the Angry Birds variety.

One of the big issues with the Playbook was that it lacked a native email client, a strategic error so huge, it’s mind-boggling that RIM allowed the product to go to market without it.

That’s why I remain skeptical about RIM’s claims. They need to build buzz at any cost of course, and it would be silly to make claims then not be able to back them up, but RIM has been stumbling and bumbling for so long now, you’ll excuse me if I’m a bit cynical about its ability to deliver.

So I’ll file this one under I believe it when I see it. The rest is up to RIM to prove it’s more than those fading US sales.

Photo of the Blackberry 9380 Curve, courtesy of RIM.

RIM is at a make or break point and the company literally is teetering on the edge of oblivion.

As this infographic on the Ness Blog points out, you can trace a direct line to the decline of RIM to the release of the iPhone in 2007. As the infographic illustrated, as 2007 dawned, RIM was hey number one, king of the hill, top of the heap with more than 10 million subscribers, then there was the moment everything changed in June of that year. The iPhone was released and so began the long, slow and steady decline of RIM and its iconic Blackberry phone.

Like many established players RIM didn’t realize it had been disrupted by the newer iPhone — and then one year later by the upstart Android. RIM’s answer was too slow in coming and the Blackberry Storm disappointed loyal Blackberry users and didn’t do anything to attract the growing legions of iPhone and Android phone users.

As market share declined steadily, so did the company’s stock price. Today, RIM is a company on the edge of oblivion. That’s why this week’s announcement was so important. As Rash pointed out, RIM seems to have put a lot of thought into this phone — even if on first glance it looks an awful lot like Microsoft’s Window Phone 7 tiled interface.

And it’s done away with the hard keyboard, the one differentiator that Blackberry fanatics seemed to love the most. But Rash writes that the new keyboard is not your typical touch-screen variety. It has been designed to be as Blackberry-like as possible and to do a better job of auto-correcting than the competition (which wouldn’t take much).

Whatever Blackberry does, it better be dramatic because the numbers just keep getting worse and worse. A year ago I wrote a post called Can RIM Come Back. If you click through, you can see a chart which traces the steady decline of Blackberry market share from February 2010 when RIM still commanded over 40 percent of the smartphone market until last February when it had dropped to 28.9 percent.

And the numbers kept on dropping from that point forward. When comScore came out with its latest US mobile phone market share numbers recently, once again RIM had declined from 16 percent in December, 2011 to 12.3 percent in March of this year, a loss of 3.7 percent. Meanwhile Microsoft, which is supposed to be finally becoming a serious player in this game, declined once again as well, dropping from 4.7 percent to 3.9 percent in that same time period.

As for the winners, Google lead the pack with 51.7 percent (up 3.7 percent for those keeping score at home) and Apple was in second place with 30.7 percent (up 1.1 percent).

Numbers like those are a bit mind-numbing for the competition. Yet Blackberry is faced with a pivotal corporate moment here. This is literally make or break time. And much like Microsoft and Nokia who will live or die together, RIM and Blackberry 10 will do the same.

The one thing Blackberry has in its favor at this point that Microsoft lacks is there is still a core group that loves Blackberry, even if consumers seemed to have fallen out of love with the hand sets. For governments and companies that must have secure phone systems, RIM is still the company they turn to.  In July of last year, I wrote a post called Security Could Be RIM’s Ace in the Hole. And I still believe that.

There is little doubt that at this point RIM is in dire straits, and it’s hard to imagine it picking up the pieces and coming back, but stranger things have happened, and at least they can play the security card, and hope for the best.

Photo by istolethetv on Flickr. Used under Creative Commons License.

It hasn’t been a great time for RIM. Just last week an anonymous executive

The letter outlined a series of problems inside the company including management and organizational problems that in the writer’s opinion were holding the company back. In the company’s response, it complained about the difficulty in responding to anonymous attacks, but acknowledged there were problems and they were taking steps to address them.

The response also indicated that RIM has a road map for a way back and is simply in an awkward space between its old systems and its upcoming one. Sounds like the same position Nokia finds itself in.

Fair enough, they are working to resolve the problem, even while they continue to lose market share in bunches. But what’s most troubling is a story last week on IT World that RIM is starting to experience developer defections. That means that companies that develop phone apps are beginning to conclude that it’s not worth the development resources to continue to develop apps for RIM phones.

And one thing is crystal clear into today’s mobile marketplace, companies will live and die by the success of the apps that each phone supports.

But is the story as bleak as it appears? RIM will you tell you it’s not. They have $3 billion in cash after all, and even though the Blackberry sales continue to be in free fall in North America, the company claims that it is selling phones in overseas markets.

This seems to me puts it in a better short-term position than Nokia, which needs to wait for Windows Phone 7 phones later this year before it can go anywhere. RIM is also waiting for phones running its next generation OS, but it’s not living in limbo in the same way Nokia has been.

And in that same response post, RIM pointed out it made $695 million in net income last quarter. This is in stark contrast to Nokia, which recently reported, it went from a projected $6 billion quarter to what they called “breaking even.”

Even though RIM is probably in far better shape, what was once, *the* choice for corporate phones is being replaced by iOS and Android alternatives. Much like Nokia, it feels like a company that has at best one more chance to find its way back before it gets sold and folded into another manufacturer’s portfolio.

While the anonymous letter might have been a wake-up call, RIM had to know where it stood before that, and that the stakes are extremely high. Whether it succeeds or fails won’t hinge on one embarrassing open letter. It will come down to product and marketing execution. And it had better make this one count.

This week, as RIM held its annual

The comScore market share scores for RIM over the last year do not tell a pretty story. Beginning in February 2010, RIM had a commanding lead in market share with 42.1 percent. One year later, they had dropped 13.2 percentage points down to 28.9. Google had passed it and Apple was nipping at its heels.

As you can see from the chart below (compiled from data in comScore press releases), the drop has been steady and startling:

You can click through to see the Top Smartphone Platform data yourself if you wish, but the numbers tell a tale of a company in decline.

The phone that for all intents and purposes was the granddaddy of the smart phone has been in market share free fall for the last year under pressure from more popular Android and Apple phones.

To its credit, RIM has not stood still. It has desperately tried to regroup and staunch the bleeding, but as you can see from those numbers, the results haven’t been so great. So what we are seeing this week is a company trying to find its footing.

To that end we have partnerships including one high profile one with Microsoft, delivered by Steve Ballmer himself, who announced that Bing search tools (including maps) would be the default choice on all Blackberry phones and the PlayBook tablet in the future.

The PlayBook itself is an attempt to get RIM back inside the enterprise via the tablet and to make it more palatable, RIM has developed a way to run Android apps on the PlayBook non-Android OS, while also announcing all kinds of new apps including Facebook and Angry Birds (which might not make IT administrators warm and fuzzy, but it will please end users).

There is also a new version of the Blackberry OS coming out. The good news is it will be on phones starting this summer. The bad news is that it won’t be backward compatible, meaning you have to buy a new phone to get it. Will that strategy work? Hard to say, but Jason Perlow certainly doesn’t have high hopes as he wrote on ZDNet, comparing the strategy to a long-forgotten early PC operating system, CP/M, which tried this approach and failed miserably, left in the dust bin of computing history.

RIM is obviously hoping that to escape that fate, but Perlow makes a good point.

There has been a flood of other announcements, too numerous to mention in a single post. The company is clearly trying hard to stay relevant and to reverse the downward trend, but part of what allowed RIM to dominate in an earlier period was that IT controlled the choice of business phones inside organizations and many chose Blackberry.

Today, end users are beginning to assert themselves, and given the choice, people have moved onto sexier devices. It’s going to be extremely difficult to win those folks back no matter how enterprise-friendly RIM remains.

But clearly RIM needs to at a minimum, stabilize the situation because it really can’t afford to continue to lose market share in bunches for much longer. Time will tell if the moves worked, but with a shifting market, it’s certainly not looking very good right now.

Photo by Kapungo on Flickr. Used under Creative Commons License. ]]> http://itknowledgeexchange.techtarget.com/mobile-cloud-view/can-rim-come-back/feed/ 0