Research In Motion Ltd (NASDAQ:BBRY)’s BlackBerry is the middle of revamping its band, launching a new OS and introducing two new phones. But the company is losing steam with its core customer base — businesses — and the blows just keep coming. Poison berries The past few years haven’t been kind to BlackBerry. Three years ago the company was sitting on top of 50% of the U.S. smartphone market share – now it has just 1.6%. For the past few years businesses have moved away from BlackBerry phones and opted for iPhone or Google Inc (NASDAQ:GOOG) Android-based devices.
Earlier this week, The Home Depot, Inc. (NYSE:HD) became the latest defector to announce it’s dropping BlackBerry in favor of iPhones. The company will transition 10,000 executives and managers to Apple Inc. (NASDAQ:AAPL)‘s iOS in the coming months. The day the announcement was made, BlackBerry’s stock dropped about 4% during trading.
Two years later, the iPhone continues to snag more businesses, and even federal agencies. The Bureau of Alcohol, Tobacco and Firearms and U.S. Immigration and Customs Enforcement Agency have both recently switched from BlackBerry to the iPhone. The U.K. government has also approved the iPhone for government employees. A report by IDC says the iPhone will far outpace both Android and BlackBerry phones in the enterprise sector by 2016.
Too soon, or maybe too late
Last year, BlackBerry CEO Thorsten Heins made it clear that the company was committed to developing products specifically for businesses. He said in an interview back in March 2012:
We plan to refocus on the enterprise business and capitalize on our leading position in this segment. We believe that BlackBerry cannot succeed if we tried to be everybody’s darling and all things to all people. Therefore, we plan to build on our strength.
BlackBerry just released two new phones, the Z10 and Q10, along with its completely revamped OS. With all the changes at BlackBerry, including its name, maybe businesses have jumped the gun and haven’t given Blackberry a chance to show what it can still offer the business world. The problem is that when businesses drop BlackBerry, it could take years before they’re willing to spend the time and money to even consider switching back. BlackBerry may not be able to wait that long.
On right path, but in the wrong direction
BlackBerry’s new operating system and new phones are aimed at winning back businesses, but that may not be enough for consumers (or investors). The company’s new OS has received positive reviews, but the current version isn’t likely to bring back BlackBerry’s market share. The IDC expects Microsoft Corporation (NASDAQ:MSFT) Windows Phone OS to overtake BlackBerry’s No. 3 spot in operating systems beginning this year and to hold that position despite BlackBerry’s overhauled system.
If that storyline plays out, and BlackBerry can’t regain significant market share, new phones and a brand-new OS won’t matter that much. BlackBerry’s facing an uphill battle and the only way it can win is by quickly earning back business customers. Investors need to see the tidewaters shift from enterprise purchases of iPhone and Android back to BlackBerry — which is a very unlikely scenario.
The article Yet 1 More Piece of Bad News for BlackBerry originally appeared on Fool.com and is written by Chris Neiger.
Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Home Depot. The Motley Fool owns shares of Apple, Google, and Microsoft.
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