Thorsten Heins, Research In Motion Ltd (NASDAQ:BBRY)’s chief executive officer, disapproves of Apple Inc. (NASDAQ:AAPL)’s ’s iPhone and termed it ‘outdated’ just a day before the long-awaited launch of the BlackBerry Z10 in the US.
What the fuss is all about
While taking a shot at Apple Inc. (NASDAQ:AAPL)’s iPhone, which governs 38% of the smartphone market in the US compared to Research In Motion Ltd (NASDAQ:BBRY)’s 5.9%, Heins said that the iPhone lacked on several fronts, including innovation and multitasking. Further, he said that people like multitasking these days and Apple Inc. (NASDAQ:AAPL)’s latest product doesn’t offer this feature. As a result, the latest iPhone device has nothing new to offer to customers, Heins stated.
In a recent response to questions about a possible takeover of the company, Mr. Heins said that such reports were surprising. Media reports suggested that Chinese computer-giant Lenovo was planning to buy BlackBerry. As news of the report broke, BlackBerry’s stock jumped, wanting a deal to revive the financial health of the phone maker. The takeover rumors sent the stock higher, but they did little to help the company in the truest sense as speculations more often than not irritate investors and customers, expressed the BlackBerry CEO.
The current dilemma
According to research firm IDC, shipments of Research In Motion Ltd (NASDAQ:BBRY) mobile phones dropped from 46% of the US market in 2008, post iPhone launch, to 2% in 2012. Today, Apple Inc. (NASDAQ:AAPL)’s iPhone and Google Inc (NASDAQ:GOOG)’s Android dominate the market, governing more than 90% of the total market share, which represents about 129.4 million users.
BlackBerry, which was previously known as Research in Motion, or RIM, has been struggling to retain its customers because of Apple Inc. (NASDAQ:AAPL). The company lost $744 million in the last three quarters and saw revenues shrink by 41%. The fourth quarter earnings report will accommodate one month of extra sales of the BlackBerry Z10 in Canada and the UK, which represent two of the strongest bastions for the phone maker.
Research In Motion Ltd (NASDAQ:BBRY) has had a smooth run recently. Its stock is currently trading at $14.91, up from $6.30 in September 2012. The stock performance has triggered changes in the way analysts view the company. For instance, Morgan Stanley (NYSE:MS) upgraded the stock to overweight from underweight. The price target has also been revised from $10 to $22 per share. Its stock has gained about 27% this year, but the overall analysts’ sentiments remain bearish. There are only four analysts who consider Research In Motion Ltd (NASDAQ:BBRY) a ‘buy’ compared with 12 who say ‘hold’ and 14 preferring ‘sell.’
And what about the competition?
Competition is heating up between Microsoft Corporation (NASDAQ:MSFT) and BlackBerry for the third spot in the mobile operating space. Apple Inc. (NASDAQ:AAPL) and Google are undoubtedly leading the race in this domain. As far as Google is concerned, it has a wider range owing to the OS, which is used by many mobile players, while Apple doesn’t believe in letting anybody share its highly rewarding software.
Nokia Corporation (ADR) (NYSE:NOK) is another player in this race that’s struggling to match the speed of Apple Inc. (NASDAQ:AAPL) and Samsung. Nokia has lost its strongholds in developed markets to both these smartphone giants. Samsung resorted to Google’s Android operating system for its mobile devices while Nokia teamed up with the Microsoft Windows phone operating system to launch the Lumia series.
Will the Z10 help achieve results?
With the launch of Research In Motion Ltd (NASDAQ:BBRY) Z10, the company is confident it will overcome the challenges the market currently presents. While the handset does look promising, one needs to wait and watch to discover whether or not this new device helps the once-overrated smartphone maker in marking a real comeback.
The article Can BlackBerry’s Z10 Revive the Firm’s Fortune? originally appeared on Fool.com and is written by Jeremiah Feliciano.
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