BlackBerry must ‘splash cash to bounce back’

BlackBerry must ‘splash cash to bounce back’

BlackBerry needs to spend its way back into success, according to industry sources speaking after the manufacturer’s shock loss and decline in subscribers.

Retail sources speaking to Mobile said the manufacturer needs to work harder at strengthening its app store, price its devices more aggressively and speed up the implementation of its BES 10 product across all operators. One senior source said: ‘It’s fair to say it is struggling. It’s struggling to get cut-through with the latest devices and I think it is hampered by a lack of apps. The BB10 touchscreen devices failed to capture consumers’ attention.’ BlackBerry posted a loss from continuing operations of $84m in its recent results, for the quarter to the end of the 1 June, although sales increased 15% to $3.1bn thanks to the launch of the BB10 devices across several new markets. CEO Thorsten Heins later told analysts that subscriber numbers had fallen from 76 million to 72 million. The results spooked investors, with BlackBerry’s share price now trading below the level it did before the launch of the BB10 operating system in January.

Retail sources were sympathetic to BlackBerry but agreed the touchscreen Z10, the launch device featuring the BB10 OS, was a misstep in retrospect. One said: ‘It failed to capture consumers’ attention.’ Another was more sympathetic, arguing BlackBerry needed to make a break with its past. He said: ‘From its perspective, it was being written off. The devices were great for businesses but not for consumers. People were saying that BlackBerry was dead. I see the mentality that it felt it needed to do something bold. The Z10 was a good attempt but it was somewhat behind the times.’

Sources said BlackBerry had been a willing partner and was cooperative in planning marketing and sales activity. Hopes are high that the Q10 device, BlackBerry’s first BB10 handset with a Qwerty keyboard, will be the longer-term success.

However, operators and retailers said BlackBerry devices were currently priced too high compared to rival handsets. The Q5, which is BlackBerry’s most recent device, went on sale at £26 per month on EE. One senior source said: ‘It has work to do on pricing. I think it needs to buy its way back into the market. There is latent demand for BlackBerry but I think it has lost the kids market with apps that have similar features to BBM coming to the market.’

While BlackBerry’s security features continue to be market leading, operator and retail sources said it needs to get to grips with its app store in order to build consumer excitement. One said: ‘The big thing it has got to do is get the app developers on board. Phones aren’t really just phones anymore, they are devices with a massive infrastructure of apps behind them.’

BlackBerry refused to comment. Speaking to analysts, CEO Heins said it was still early days for the manufacturer. He said: ‘We are five months into our platform transformation that we anticipate will drive future smartphone devices, greater enterprise efficiencies, and new mobile computing opportunities for many years to come.’

Written by Mobile Today
Mobile Today

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