Falling behind the technological curve
Research In Motion Ltd (NASDAQ:BBRY)’s Messenger service, which is available on Android, iOS and BlackBerry OS, was the company’s only bright spot in a portfolio of declining businesses. BlackBerry once claimed that its mobile chat service, designed to compete with WhatsApp, Apple Inc. (NASDAQ:AAPL) iMessage, Facebook Messenger and Viber, had 60 million active global users. However, that figure pales in comparison to WhatsApp and Viber, which respectively boast 250 million and 200 million users. iMessage has 190 million users, while Facebook Inc (NASDAQ:FB) currently has 1.1 billion users. In other words, BlackBerry’s Messenger service is unimpressive, and is fairly insignificant to the company’s future.
BlackBerry also has no plans to release another tablet, after the disastrous failure of the PlayBook, which the company is leaving behind without an upgrade to BB10. However, sitting out of the tablet race could be disastrous, since companies such as Samsung and Sony are already concentrating heavily on producing “phablets” that blur the line between tablets and smartphones. Analysts at Barclays forecast that the phablet (larger than 5-inch) market will grow sales 70% annually over the next three years, evolving into a $135 billion market by the end of 2015.
In contrast, CEO Thorsten Heins once claimed that tablets will fade away “in five years” and that a single computing device, powered by a single smartphone, will be the future of computing. However, Heins has offered little insight on what that “unifying technology” will be and how BlackBerry intends to capitalize on that paradigm shift.
What BlackBerry needs to do to survive
BlackBerry is stuck where Nokia was three years ago – obsessively clinging to its past, underestimating its competitors and refusing to partner up with a larger name in mobile operating systems.
BlackBerry mistakenly believes that its reputation for robust security will keep the revenue flowing in from larger businesses and government agencies. Unfortunately, most major government agencies, including the Pentagon, have already dumped their aging BlackBerry devices for iPads and iPhones. If Apple Inc. (NASDAQ:AAPL)’s security measures are tough enough for the Pentagon, then they should be more than adequate for businesses.
If BlackBerry wants to survive, it needs to learn humility. Partnering up with either Google Inc (NASDAQ:GOOG) or Microsoft Corporation (NASDAQ:MSFT) could be the company’s only salvation. Without the backing of a widely adopted mobile operating system, the availability of apps – the lifeblood of a smartphone – will remain sparse.
If Elop hadn’t forced Nokia to abandon Symbian, the company would be stuck in the same position as BlackBerry today. Heins needs to step up, acknowledge that Research In Motion Ltd (NASDAQ:BBRY) is dying a slow and agonizing death, and realize that users are going to need much more than a QWERTY keyboard from the last decade to satisfy their modern smartphone desires.
The article The End of the Road for BlackBerry originally appeared on Fool.com and is written by Leo Sun.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
