The analyst’s view: BlackBerry

Samuel Gee
Technology analyst
Mintel

BlackBerry’s over-reliance on corporate clients led the firm to misjudge the importance of advances made in smartphone operating systems, which were designed mainly for consumers.

As a result, the company failed to notice the headline-grabbing, people-pleasing smartphone features: large touchscreens, multi-touch gesture control, a plenitude of apps. The BlackBerry began to resemble a product out of touch.

The services that were resonating with consumers, such as BBM, were restricted from integration with Android and iOS. The release of BB10, and the handsets running it, is not a panacea. The odds of clawing back share in what is now a diverse and established market are long.

Releasing an operating system with similar features to market-leading competitors will leave BlackBerry as the underdog. Mintel reported in February that 47 per cent of UK smartphone owners were on Android devices, 21 per cent on iOS. These are the users that BlackBerry will need to tempt, but thanks to the delay in the firm’s modernisation strategy they are likely to be well-embedded by now in their respective operating systems, with significant investments in applications and platform-specific services.

To remain competitive, BlackBerry will have to get as many phones as possible into consumers’ hands, broadening the network of users that can evangelise about the new operating system.

There is a possible opportunity for BlackBerry in targeting the demographic least engaged with the smartphone market: older consumers. This group could, if enticed, be drawn in without the ecosystem migration problem posed by their younger counterparts. They would provide a reliable bulwark against further financial woes while the manufacturer plans how to appeal to a younger, more heavily engaged generation.

It would be a risky move. But BlackBerry has little brand equity, and without the success of a daring gamble, its fate is unlikely to be rosy.