Bye-bye BB

BlackBerry maker RIM’s latest financial results and corresponding announcements that it is to delay its crucial turnaround OS BB10 and lay off almost 30% of its staff were not just disappointing. They were disastrous. As one analyst put it, BlackBerry’s downfall is like “watching a puppy die”. Ouch.

Lara O'Reilly

The seriousness of the delay of BB10 is not to be underestimated. It is potentially more damaging than the just announced £334m quarterly loss and the impact of its 5,000 job cuts.

BB10 is RIM’s last chance to prove its relevancy at a time when it has lost considerable ground to rivals such as Google’s Android and Apple, whose software – subjectively – is far superior.

BlackBerry has an 11% share of the mobile phone market in the UK, compared to Apple’s 19% and Android’s 15%, according to Ipsos Mori. That number is quite favourable compared to its US market share, which has plummeted from 41% in 2007 to 4% in 2012, according to IDC. The UK favourability is largely due to Brit teens’ fascination with native messaging service BBM and companies still relying on legacy BlackBerry work devices.

A 2012 OS launch would offer the opportunity for BlackBerry to redefine its unique selling points, like messaging, security and email, as well as introducing some well-worn smartphone features like Android apps, HTML5 and animations, which have been sorely lacking from previous versions.

BB10 was originally due to launch in the first quarter of this year. This was then delayed to “late 2012” and now RIM has admitted further setbacks mean it won’t be on the market until at least 2013. Kevin Restivo, analyst at IDC said such a launch date was “akin to launching fireworks underwater”.

Not only will BlackBerry miss the lucrative Christmas gifting period, it will also be attempting to launch its OS after the much anticipated unveiling of the iPhone 5 and after Windows Phone software undergoes a major upgrade – not to mention after the array of Android devices that will become available before next year.

Reports have suggested the delay could signal RIM’s intentions that it is looking to sell or license its network business or even form an alliance with another company, similar to the partnership between Microsoft and Nokia.

Such an alliance would mean that the new owner could fund marketing and operational expenses, meaning BlackBerry could focus on its network strengths to deliver a new experience under a more attractive (to investors as well as consumers) parent brand.

BlackBerry has not yet stated any intentions for any such moves, saying its priority is to launch BB10 as soon as possible, seemingly independently. Once again, investors and consumers are left waiting for a brand that can’t be afforded any more time in such a nascent market. Nobody wants to be another Kodak.

The majority of analysts have concluded that RIM’s inaction means BlackBerry is a lost cause.

The irony is surely not lost on the fact that BlackBerry’s current multimillion pound brand campaign is designed to appeal to “people of action”. BlackBerry needs to be decisive and take action quickly: a revolution is in order. Its latest brand campaign means nothing if the company itself does not lead by example.

As BlackBerry itself says: “There are people who don’t. And there are people who do”. The problem is that those who do won’t choose a snail-paced BlackBerry.

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