BlackBerry was once, and not that long ago, synonymous with the word smartphone. Nearly single-handedly, it spearheaded the revolution in mobile data, driving a legion of people to use their devices for more than phone calls and SMS. But lately it’s starting to feel like BlackBerries, and their maker RIM (NSDQ: RIMM), have already seen their best days.
Unanswered questions about where RIM is going with its flagship BlackBerry devices, combined with rising skepticism about its much-touted PlayBook tablets, has put the company through the ringer these last several weeks:
RIM has been pushing out news and public appearances to draw on the growing anticipation for RIM’s as-yet unreleased PlayBook tablet — something that the company’s spin doctors no doubt see as a bold, aggressive strategy.
On one side this has seemed to work: since August, the company’s stock has surged 38 percent on tablet anticipation, writes Bloomberg.
But it seems that anticipation can only get a company so far. Eventually the public needs more. One case in point: a couple of weeks ago, co-CEO Mike Lazaridis gave an awkward appearance at the D:Dive Into Mobile conference where he dodged questions about the company’s handset strategy. What he did do was bring along and promote the new tablet, complete with a halting demo for his interrogators. Judging from the industry reaction, though, the appearance clearly didn’t wow people enough to forget about how little insight there was into RIM’s main line of business, those BlackBerry handsets.
There are already analysts starting to wonder whether the PlayBook will struggle to win market share in an increasingly crowded market. The report in Bloomberg notes that at least six analysts have reduced their ratings on RIM in the last six weeks, and less than half recommend buying the company’s stock, as questions over loom over what impact a next-generation iPad, and the proliferation of other tablets, will have on RIM’s product.
In any case, even a PlayBook launch that meets expectations will not be able to carry the company: the device is expected to contribute to less than five percent of the company’s sales in 2011, if it manages to sell the 2.55 million devices analysts expect it to.
There are others throwing doubt on RIM. An opinion piece published yesterday in the influential gadget blog Engadget, written by the site’s reviews editor, adds more fuel to the fire. In the post, she admitted that she was once a proverbial CrackBerry addict, but losing her device the other day gave her pause to rethink whether she should replace it. The piece is funny, but the conclusion isn’t, at least for RIM: she got a Droid.
It looks like it’s not just the influencers who are making that switch: some data leaked on Verizon’s handset sales showed just how much of a nosedive RIM has had with the mobile operator:
Whereas in October 2009 RIM made up more than 90 percent of Verizon’s smartphone sales, by November this year that share was below 20 percent. On the Verizon network, this has been down to the explosion of Android.
A comment from a reader on our Verizon post summed up the issues RIM has for users:
“Of course Blackberry sales are down at Verizon! The Blackberry devices sold for the network are slow, outdated and light years behind Android devices in terms of advanced features. I say this as an avid Blackberry user. I’m dying on the vine waiting for a new Blackberry to be released with an HTML browser, a faster processor than 1 ghz, and touch capabilities. The Storm is terrible, yet it’s the only dog that Blackberry has in the touch fight. (I won’t ever go to AT&T (NYSE: T) so that eliminates the Torch from this discussion.)
“I also speak as someone who couldn’t care less about most apps. Apps mean almost nothing to me. Nor does music or video streaming. I use my Blackberry for email, text, phone, and internet. So it’s not like I’m asking for much.
Until RIM starts to play with the big boys, they’ll continue to fall behind.”
Both the professional gadget pundit, and the casual observer, seem to actually be on the same page: BlackBerry’s most dedicated users seem happy with its core (if limited) functionality. At the same time, they are painfully aware of what those devices are not doing well: fast web access, apps, responsive touchscreens and user interfaces/OS design makes everything work intuitively and seamlessly.
In its defense, RIM is doing some of the right things: the QNX OS that will run the PlayBook will apparently be easier for developers to work with than the OS currently running on the handsets.
The company is also making some acquisitions that could be promising for future device design, if RIM figures out how to properly integrate them into its operation.
But ultimately, an early mover like RIM isn’t always the best at then driving the agenda for how things should develop in the future. Nokia (NYSE: NOK), too, has figured out that fact the hard way. The question is now whether RIM (and for that matter Nokia) can at least catch up before they lose more loyalty and further lose the mindshare game to win new users?