In 2009, when Research In Motion Ltd (NASDAQ:BBRY) launched its ‘BlackBerry boys’ campaign and lowered the price of the entry level Curve model, the younger generation became addicted to BlackBerry Messenger, a free substitute to SMS. It saw a loyal customer base, sales zoomed up, share prices soared but little did the company know this success would be short lived.
Now, time is running out for this Canadian smartphone maker as customers prefer other systems, like Android and iPhone. Despite running into losses last year, it has now put its foot in the door by accelerating in both software and hardware innovations to regain its lost market share. This article will analyze what went wrong and how it promises to regain its lost fame.
Blackberry’s major chunk of revenue came from the enterprise market, and focusing on consumers was a big risk in the past. Then came the phase where people started to keep just one phone – both for business and personal purpose. That was the point where Research In Motion Ltd (NASDAQ:BBRY) failed to make the paradigm shift. Whatsapp the social media app and Skype the video calling service, unlike Blackberry Messenger, worked in all platforms including Android, iPhone and Microsoft. It made Research In Motion Ltd (NASDAQ:BBRY) less appealing to the youth as BBM lost its uniqueness, but this was just the tip of the iceberg.
Research In Motion Ltd (NASDAQ:BBRY) has not released a new phone in a long time in the middle and lower segment, whereas technological breakthroughs from Samsung and Apple Inc. (NASDAQ:AAPL) changed the face of the war-zone forever. Research In Motion Ltd (NASDAQ:BBRY) was nowhere from the stiff competition of the S2, S3 and the iPhones. Older models, like Curve, have literally dropped off the sales chart.
As a result, in the recent earnings release, BlackBerry reported a 76 million subscriber’s base – a 3 million loss from last quarter. Handset shipments also declined 46% year-over-year to 6 million. Revenue fell $2.68 billion from $4.19 billion a year ago primarily due to the decreasing revenue in America.
The smartphone industry
There are a plethora of companies waiting to get a slice of this lucrative market as smartphone shipments are expected to reach 900 million units in 2013. BlackBerry, which once accounted for 42.6% of the total US Smartphone base, is now just a marginal player in the industry.
|% share of Smartphone subscribers|
Google leads on the software, whereas Apple Inc. (NASDAQ:AAPL) leads on the hardware. Research In Motion Ltd (NASDAQ:BBRY) and Microsoft are now fighting hard for the number three spot.