The company formally known as Research in Motion Ltd (NASDAQ:BBRY) held a public event on January 30 and announced a name change for the company to Blackberry. In addition, they launched of a new operating system for Blackberry phones and 2 new phones, the Z10 and Q10. This is seen as a last attempt by the struggling phone manufacturer to regain the market share it once had, and then lost to other competitors like Apple Inc. (NASDAQ:AAPL), Nokia Corporation (NYSE:NOK), and Samsung etc. globally.
Declining stock price and market share
In the early years of this century, Blackberry phones were considered the symbol of corporate glamour and were a prerequisite for the most dynamic industries like Investment Banking etc. Enterprise activation for Blackberry is supposedly one of the most secured networks and data integrity is almost absolute. Besides, their messenger service (popularly known as BBM) was one of the pioneers in the field of social networking. As a result, their market audience was spread across 2 different categories: 1) the corporate individual who would need access to office mails on the go and 2) the young generation who would share messages, pictures, songs, etc. through the messenger service. Blackberry saw huge increases in their annual numbers due to the increasing demand in developing countries and the emerging economies like India, China, Brazil, etc. However, demand slowed down considerably in the US and top European countries.
The only reason for the lack of growth from the developed countries was that the company failed to upgrade its products in line with the ever changing technology. Other competitors raced ahead on account of better quality products offering better features and enhanced user experience. The market share of Blackberry phones started to decline from ~20% in 2009 and have been on a constant decline over the past couple of years to ~5% now as they failed to adapt themselves to the changing market requirements. Luckily for them there was some demand from the emerging markets for the lesser priced phones, and hence they were able to manage some additional sales. On account of all this, the stock price has been going down over the last 5 years and touched an all-time low of $6.22 sometime in the month of September 2012. The company's management decided to undertake a slew of measures to prevent its downfall. As a result the company axed a few jobs as well to reduce costs and achieve operational efficiency. On the offerings front, a decision was taken to upgrade the operating system so as to include new features and release new versions along with new phones in 2012. However, the product launch has been continuously delayed over the last few months which have further resulted in loss of confidence amongst the Blackberry users and the investor community.