RIM will be relying heavily on its new range of BlackBerry handsets to bring about a change in its fortunes. The manufacturer’s revenues and market share have been under pressure in the face of the continuing success of Apple and the ever-increasing Android onslaught.
RIM posted record revenues of $19.9bn for the year ending 26 February 2011, up 33% on the previous year with a total of 52.3 million smartphones shipped in the period.
However, revenue for its first quarter ending 28 May 2011 dropped 12% to $4.9bn on the previous quarter, although it was up 16% on the same quarter in 2010. The company announced in July it was slashing 2,000 jobs, some 10% of its global workforce.
Jim Balsillie, co-CEO at RIM, commented in June: ‘Fiscal 2012 has gotten [sic] off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter.’
RIM today (3 August) unveiled those products: the Bold 9900; Bold 9930; Torch 9810; Torch 9850; and Torch 9860. It is the largest launch in RIM’s history, but will it be enough to claw back market share from the likes of Apple, Samsung and HTC?
In a note out today, Ovum principal analyst Tony Cripps said: ‘RIM's new BlackBerry smartphones could well be the most important devices in the Canadian smart device vendor's history, following a recent slowdown in device shipments, staff cuts and doubts over the company's strategy and leadership.
‘On the face of it the two new Bold devices and three new full touch-screen Torch models look competitive. The latest BlackBerry 7 OS and much-improved BlackBerry Browser certainly seem to offer a compelling device-side user experience, one very much comparable to the oft-maligned PlayBook tablet. However, the real proof of the pudding is whether that software-driven experience captures the imagination of third parties who might wish to write and deploy applications or content to those devices.’
Cripps added: ‘RIM can make a good case for having created the most complete web browsing experience on a portable device so far on the PlayBook, a capability that may well now be shared by its new BlackBerry 7 OS devices. However, neither developers nor consumers are yet at the point where this capability substitutes fully for downloadable applications.
‘Given that smart devices are increasingly sold to consumers as much on a promise of what those devices can deliver in terms of applications and services as they are on their design, RIM needs to be lobbying big consumer brands hard to embrace and promote BlackBerry 7 OS as much as it can. Success in this endeavour could prove crucial in deciding the fate of RIM's latest devices and maybe its longer term future.’
Malik Saadi, principal analyst at Informa Telecoms & Media said: ‘We certainly expect these new devices to help to boost sales in 2H11 as they all come with additional features, cool apps and are targeting different segments of the market and various wireless networks.
‘However, the majority of these devices were meant to be launched in Q2 2011 but for various reasons this did not happen, which has caused much disappointment in the operator community. NFC is a nice-to-have feature, but, as there are limited applications and services supporting it in market currently, it is not a huge differentiator and only adds an additional cost to the device. Also, the “all-touch-screen” Torch has been a while coming as a natural successor to the disappointing Storm, particularly when the smartphone market has gone touch-screen mad over the past 18 months.
Saadi concluded: ‘While RIM has made lots of improvements to its new OS, there may be some pitfalls with backwards compatibility. Our concern here is the fact that BB6 apps are not automatically compatible with BB7 which means that developers will have to create one version for BB6 and another for BB7 in order to target a wider audience. Also, as there is no upgrade path from BB6 to BB7, users who want BB7 will need to get one of the new smartphones, which may discourage developers from supporting BB7 until these device sales grow.’
It is early days yet, but there is a view that consumers who like the traditional QWERTY keyboard BlackBerry will like the Bold handsets. The real question is whether consumers who favour touch-screen handsets would switch from an iPhone, Samsung Galaxy S II or HTC Sensation to a BlackBerry Torch. If they don’t, it may leave RIM struggling to regain market share globally.