This past week was not particularly a good one for mobile device maker BlackBerry, formerly known as Research In Motion.
This past Friday, BlackBerry, announced details about their first quarter earnings, and Wall Street was caught off guard, in their opinion, about how few new BlackBerry Z10 and Q10 devices were sold. For the quarter wrapping up, BlackBerry sold about 2.7 million new BlackBerry 10 devices. BlackBerry 10 is the company’s mobile operating system, similar to Google’s Android or Apple’s iOS. Adding insult to injury, BlackBerry sold 4.1 million of their older, BlackBerry 7-powered devices for a combined total of 6.8 million units shipped. Once the news was released, BlackBerry’s stock price started trending downward, some would say “crashing”, down 26-28%, ending up at $10.46. Worse, according to BlackBerry, their subscriber base has shrunk by 4 million users ending up at 72 million users globally.
To help mount their turn around, BlackBerry will continue to rollout their existing Z10 and Q10 around the world while bringing new BlackBerry 10 devices like the “budget” Q5 to “emerging” markets this summer and through-out the calendar year.
Research In Motion was caught completely off guard, as was just about every other smartphone maker, in 2007 when Apple released the game changing iPhone. Everyone, except maybe Google, has been chasing the fruit phone maker since.
What surprises me, however, is that history seems to repeat itself. I always hated it when my parents or teachers told me this, but I have come to accept and believe it. You see, there was another smartphone maker that found itself in a similar position a few years ago: Palm.
There are a number of similarities between BlackBerry and Palm. Palm, like BlackBerry, was down on their luck after the iPhone was released. Palm was limping along on sales of their previous generation Palm OS and Windows Mobile smartphones just like BlackBerry is doing now. BlackBerry, like Palm, is desperately trying to reinvent itself with the Z10 and BlackBerry 10 just like Palm attempted to do with the Pre and webOS. We know, that after a long, drawn out battle, Palm after being acquired by HP, finally came to an end. Will BlackBerry and the BlackBerry 10 mobile operating system suffer a similar fate? Will they continue to be a niche corporate market player or will they finally fade off like Palm?
We don’t know the answer to that question. Make no mistake, what BlackBerry CEO Thorsten Heins is attempting to do to turn around his company is extremely difficult. This past spring I had a chance to play with the new Z10 handheld and BlackBerry 10. The phone had a quality design and feel to it. The new software, was still very much foreign to me after having used older versions of the BlackBerry software. While the gestures did leave me bewildered during the few minutes I had with the phone, people that I know who have purchased the Z10 have gotten used to it.
Oh, and there is one other similarity that BlackBerry shares with Palm, a small, yet dedicated core user base. Will it be enough to carry BlackBerry through the stormy weather until BlackBerry can grown their subscriber base and software marketshare? We will have to just wait and see.