TECHNOLOGY

BlackBerry faces ‘ongoing uncertainty’ despite new boss, BBM app

Despite a change in management, and launching a cross-platform BBM application, BlackBerry continues to face “ongoing uncertainty”, according to tech experts. (File photo: Reuters)

Troubled smartphone maker BlackBerry faces ‘ongoing uncertainty’ despite management changes and an attempt to attract more instant-messaging users, technology experts said.

BlackBerry announced on Monday it had fired its chief executive Thorsten Heins, and turned to a $1 billion fundraising plan in a bid to stay afloat.

The news came two weeks after the Canadian firm launched its native BlackBerry Messenger (BBM) app on rival Android and Apple handsets, in an attempt to win back some of its share of the instant-messaging market.

Daniel Gleeson, mobile analyst at research firm IHS, said the change in management “introduces more uncertainty” at BlackBerry.

“The ongoing uncertainty over BlackBerry’s future will at the very least delay some purchasing decisions and possibly even lose some sales for BlackBerry,” Gleeson said in a research note.

“BlackBerry is poised to ship under 20 million handsets in 2013, a 63 percent decline from its record volumes in 2011. IHS predicts BlackBerry shipments will fall to under 5m by 2016 as the company retreats from mainstream consumer markets and focuses on its enterprise customers.”

BlackBerry reported a near $1 billion loss in the second quarter of 2013. This was a result of many unsold Z10 devices, the company’s first phone to run BlackBerry 10 software, according to media reports.

BlackBerry sales in the Middle East – traditionally one of the company’s stronger markets – have also suffered, regional experts said.

“From a sales point of view… I don’t think BlackBerry quite has the market share as it did last year,” Ashish Panjabi, chief operational officer at Jacky’s Electronics, told Al Arabiya News. “In the long term [BlackBerry] needs to find something that makes them a little different; the points of differentiation are slowly fading away.”

Cross-platform BBM

BlackBerry claimed 20 million new users in the first week of the launch of its cross-platform instant-messaging application, but several Arab tech experts and academics say the move is too little too late to save the company.

“I think it’s a little bit late for BlackBerry now,” Dr. Hisham el-Zabadani, assistant professor of computer engineering at the American University in Dubai, told Al Arabiya News.

“They should’ve done this [launching BBM across iOS and Android] a long time ago,” he added.

Other commentators were more sympathetic, noting the huge demand for the new BBM app.

“If they’ve done that a little earlier it would’ve even been better, but it seems there is interest. All of a sudden they have story when they didn’t a week ago,” said Dr. Khalid Khawaja, vice president of academic affairs at Rochester Institute of Technology in Dubai.

BlackBerry announced last week that it now has 80 million active users on BBM.

“In just seven hours we saw overwhelming interest in BBM for Android and almost one million installs,” Nick Horton, Managing Director of BlackBerry for the Middle East and North Africa, told Al Arabiya News via email.

Rami AlKarmi, founding partner and CEO at Arcoten Holdings, and a startups mentor at 500 Startups, expects the interest to be short-lived.

“Many people raced to download the new BBM application… but then they were mostly uninterested in using it,” he said. “Will these numbers hold on and last till next month? I doubt it.”

BBM’s main competitor is instant-messaging platform WhatsApp, which currently enjoys 350 million monthly active users, according to recent figures released by the company.

A few years ago, BBM was leading the instant messaging sphere in the MENA region and beyond.

“The reason why WhatsApp made it so far with 350 million users is because BlackBerry Messenger wasn’t on other platforms,” said el-Zabadani. “If BBM was on other platforms [earlier] they would have overtaken WhatsApp a long time ago”.

Sales decline

AlKarmi said he doubts that the release of the cross-platform BBM app would boost sales of BlackBerry handsets in the region, noting that there was “a huge retail-sales decline” in the Arab world.

But he believes that “the sale of BlackBerry devices will still be sustained in the large corporate or enterprise customer segments.”

BlackBerry defended its business and said it was confident in its BB10 operating system.

“We will continue to drive the sales and adoption of the BlackBerry 10 platform,” said Horton.

“We will continue to deliver new technologies and services, which includes multi-platform BBM. Our plans have not changed and our core businesses are strong.”

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Last Update: Wednesday, 6 November 2013 KSA 20:01 - GMT 17:01
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BlackBerry faces ‘ongoing uncertainty’ despite new boss, BBM app
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