It’s Make or Break Time for the BlackBerry

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If there was a tech company that wanted to put 2011 behind it, Research in Motion would have to be up there. Lost market share, lost stock value, increasing loud doubt over its leadership and several network outages made the last year a pretty awful one for the once-dominant smartphone leader.

RIMNot that everything got better in 2012. The problems that dogged it last year are still around and the company is facing a day of reckoning of Mayan proportions. It started 2011 with a 30.1 percent market share, according to comScore. It finished 2011 with 16.1 percent.

This year will see the release of BlackBerry 10, formerly BBX, the unified operating system for its PlayBook tablet and smartphones that is built on the QNX operating system. Details on the first phone running BB 10, codenamed “London,” leaked to the gadget site The Verge. The phone is estimated for either a second or third quarter release.

The company has just released a major OS upgrade for its PlayBook tablet, which is going nowhere and now selling for $200 off its introductory price. This year will also be the year the company starts delivering LTE-powered phones. Will that be enough to stop the lost share?

BlackBerry London PrototypeIt depends on whom you ask. Will Stofega, program manager for mobile device technology and trends at IDC says the company isn’t doomed at this point, it’s just undergoing a difficult transformation.

“The challenge is when you are going through this platform transformation you don’t create more problems. You have to execute perfectly. They are certainly more than able to do it. There are a lot of folks that are counting them out and I think that’s too early,” he said.

But Ben Bajarin, principal analyst for Creative Strategies, saw a bad sign at the recent Consumer Electronics Show. “RIM’s booth at CES was empty. That can’t be a good sign when no one is circulating your booth,” he said.

More importantly, and more empirically, this is a big year for enterprise contracts, where RIM makes big money.

“RIM does business contracts with enterprises on a two-year basis. This year is when a lot come up for renegotiation. There’s a chance a lot won’t renew due to the trend of consumerization of smartphones,” he said.

A peculiar trend has taken place in IT in recent years. Rather than firms providing employees with company-issued hardware, employees are bringing their own gear to work, and the IT departments are supporting it.

The trend mostly started with Apple users, who wanted to bring their Macs and iPhones to work, but it has expanded into Windows-based PCs and Android smartphones, too. A recent survey by Forrester research found half of 1,700 information workers surveyed brought their own phone to work.

“They simply cannot compete and maintain relevance if they can’t keep their business customers appeased, but the challenge is this trend toward the consumerization of IT. To compete in IT you also got to win in consumer just because of this trend,” said Bajarin. In that regard, RIM is losing ground to iOS, Android, and potentially Windows Phone.

Stofega is optimistic that a report commissioned by the board of RIM, which will look at everything from replacing leadership to what business opportunities should be pursued, will yield results. But despite the numerous calls for the removal of co-CEOs Jim Balsilie and Mike Lazaridis, the two are founders and major shareholders. Unless they step down, they aren’t going anywhere.

Stofega believes the BB 10 port is key to survival. “Qnx can scale and do up to 32 cores on the processing side, and developer can program to the bare metal. They aren’t happy about the delays, but one large developer told me [programming to the hardware] is exactly what they need to take advantage of the processor,” he said.

But Bajarin says it remains to be seen. “We really have to wait to see if this new OS with new handsets can be competitive on the landscape. If they can create some pull it can have a shot at generating some interest with consumers,” he said.

 

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