BlackBerry needs its smartphone to wow consumers
TORONTO — The maker of the BlackBerry smartphone is promising a speedier device, a superb typing experience and the ability to keep work and personal identities separate on the same phone. It's the fruit of a crucial, long-overdue makeover for the Canadian company.
Thorsten Heins, chief executive of Research In Motion Ltd., will show off the first phone with the new BlackBerry 10 system in New York on Wednesday. A marketing campaign that includes a Super Bowl ad will accompany the long-anticipated debut.
Repeated delays have left the once-pioneering BlackBerry an afterthought in the shadow of Apple's trend-setting iPhone and Google's Android-driven devices.
Now, there's some optimism.
Previews of the software have gotten favorable reviews on blogs. Financial analysts are starting to see some slight room for a comeback. RIM's stock has nearly tripled to $16.18 from a nine-year low in September, though it's still nearly 90 percent below its 2008 peak of $147.
Most analysts consider a BlackBerry 10 success to be crucial for the company's long-term viability.
“The old models are becoming obsolete quickly,” BGC Financial analyst Colin Gillis said. “There is still a big user base but it's going to rotate off. The question is: Where do they rotate to?”
The BlackBerry, pioneered in 1999, has been the dominant smartphone for on-the-go business people. Corporate information-technology managers like the phones because they're relatively secure and easy to manage. Many employees loved them because of physical keyboards that were easier to type on than the touch-screen iPhone. Oprah Winfrey declared it one of her “favorite things.” People got so addicted that the device was nicknamed “the CrackBerry.”
The BlackBerry began to cross over to consumers. But when the iPhone came out in 2007, it showed that phones can do much more than email and phone calls. They can play games, music and movies. Android came along to offer even more choices. Though IT managers still love BlackBerrys, employees were bringing their own devices to the workplace — a trend Heins acknowledged RIM was slow to adapt to.
Even as BlackBerry sales continued to grow in many parts of the world, many BlackBerry users in North America switched to iPhones and Android devices. BlackBerry's worldwide subscriber based peaked at 80 million in the quarter that ended Sept. 1, before dropping to 79 million in the most-recent quarter. In the United States, according to research firm IDC, shipments of BlackBerry phones plummeted from 46 percent of the market in 2008 to 2 percent in 2012. Most phones in use today are iPhones or Android devices.
RIM promised a new system to catch up, using technology it got through its 2010 purchase of QNX Software Systems. RIM initially said BlackBerry 10 would come by early 2012, but then the company changed that to late 2012. A few months later, that date was pushed further, to early 2013, missing the lucrative holiday season. The holdup helped wipe out more than $70 billion in shareholder wealth and 5,000 jobs.
Although executives have been providing a glimpse at some of BlackBerry 10's new features for months, Heins will showcase a complete system at Wednesday's event. Devices will go on sale soon after that.
RIM redesigned the system to embrace the multimedia, apps and touch-screen experience prevalent today.
“Historically, there have been areas that have not been our strongest points,” said Rick Costanzo, RIM's executive vice president of global sales. “Not only have we caught up, but we may even be better than some of the competition now.”
Costanzo said “no one else can touch” what RIM's new system offers.