BlackBerry back in the ring?

In what many are calling a last-ditch attempt to compete with the growing iPhone and Android markets, Research In Motion (RIM) unveiled five new BlackBerry smartphones based on the BlackBerry 7 operating system (OS) yesterday.

Embattled RIM rolled out two new BlackBerry Bold models (which were announced in May, together with the BlackBerry 7 OS), as well as three new BlackBerry Torch models, in the company's first overhaul of its handsets since August last year.

“This is the largest global launch of BlackBerry smartphones in our history,” says RIM president and co-CEO Mike Lazaridis, promising faster performance, enhanced browsing and richer multimedia on the new devices.

The BlackBerry Bold 9900 and 9930 are RIM's thinnest smartphones to date at 10.5mm, and offer the signature qwerty keyboard, as well as touch-screen display.

The new BlackBerry Torch 9810 builds on the original Torch 9800, combining touch display with a slide-out keyboard. The BlackBerry Torch 9850 and 9860, however, introduce an all-touch design and 3.7-inch display, the largest ever on a BlackBerry smartphone.

Each smartphone also features a 1.2GHz processor, HD video recording, 24-bit high-resolution graphics, and advanced sensors enabling new augmented reality applications such as Wikitude.

This year has been difficult for RIM, as its tablet offering, the PlayBook, struggled to win over consumers, and the company reported bleak financial results for the first quarter. At the time, co-CEO Jim Balsillie said: “The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter.”

According to reports, following the press conference at which the new devices were unveiled, RIM's stock rose 5% in Nasdaq stock market trading yesterday.

The company has, however, lost 58% of its stock value this year, and last week announced it was cutting 10% of its global workforce to trim costs, while also reorganising its upper management.

Despite market gains in African and Middle Eastern regions, RIM has been rapidly losing customers in the mature markets to Apple's iPhone and handsets running Google's Android software.

In the face of such losses, RIM's new devices have to make up for a lot of lost ground.

Analyst and MD of World Wide Worx Arthur Goldstuck says RIM needs to understand that its loss of market share in Western markets is directly related to the extent to which its platform is app-friendly.

“They understand the technology of the phones, they understand the business needs, but they don't seem to have grasped where the hearts and minds of the users have moved,” notes Goldstuck.

“However, there is huge misinformation being put out by the analyst community in the US, which confuses market share with sales. Because the smartphone market is exploding, and BlackBerry sales have not exploded in tandem with it, their overall market share has plummeted, although their sales as such have not.

“The result is that their market value has been punished, and that has placed a pall on the brand that a phone refresh won't address in its own right.”

According to results of the BMI-TechKnowledge SA Smartphone and Tablet Early Adopter Study, only one in five current BlackBerry owners plan to stick with the brand for their next choice of smartphone.

However, Ryan Smit, digital consumer unit head at BMI-TechKnowledge, says the new releases will definitely change consumers' intentions. “New devices on offer make consumers more likely to want to buy and can change the attitudes of consumers,” notes Smit, explaining that consumers are fairly fickle when it comes to smartphones.

The research, which was conducted a couple of weeks ago, shows that 24% of early smartphone adopters in the country own a BlackBerry handset. RIM has grown its local market share from 6% previously, but according to the survey, only 20% of respondents wanted a BlackBerry as their next device.

In contrast, 30% of respondents said an iPhone would be their next smartphone of choice.

“While this is a major release from RIM's perspective, it's not that major in terms of new features or functionality,” says Smit. “A lot of early adopters look at specifications for smartphones, and the new releases do not necessarily measure up against competitors. It's unlikely that these models will convert non-BlackBerry users, although they may appease loyal BlackBerry customers.”

According to Smit, RIM functions at two market levels, with the Bold and Torch models catering for the high-end, early adopters, and the Curve catering for the lower-end of the market.

“RIM might struggle with competition among the high-end device market, but it will continue to do well with the Curve in the lower-end, with its attractive price point.”

Smit adds that the rumours of QNX-based BlackBerry devices from RIM are not helping the company. “These rumours have been around for some time and the fact that the latest releases are not QNX-based, may cause some consumers to rather opt to wait for next year's releases.”

According to Smit, a move to the QNX platform would help BlackBerry devices to have more app functionality and would allow for Android apps to be run on the devices - which would be a major “plus”.

The 2011 Mobility Study conducted by World Wide Worx, released in February, showed a relatively positive outlook for RIM in the local mobile market.

The Mobility brand momentum calculations showed a strong move towards smartphones, and BlackBerry in particular, with the number of users expected to increase by six times the current amount.

At the time, 24% of the current mobile market claimed their next phone would be a BlackBerry. The device then accounted for 4% of the total mobile market, according to the study. A relatively small 3% of users said at the time that they planned to upgrade to an iPhone.

Goldstuck says the Mobility forecasts have held true, and BlackBerry remains the best-selling smartphone brand in SA.

“The brand momentum remains very powerful in this market, and the new range will reinforce it. However, our indication from users that they are likely to abandon Samsung is being reversed by the new range of Android phones from Samsung.

“We expect BlackBerry to remain the dominant smartphone brand into next year, with Samsung giving them a run for their money, and HTC's phones occupying a niche for high-end touch-screen users who don't want to buy into the iPhone world.”

Goldstuck adds that Android will rise fast in the South African market and could potentially overtake BlackBerry in the next two years.

“Once the new version of Windows Phone appears, though, it will rival Android. Two years down the line, then, we can expect to see three major operating systems at play - and at war - in the South African smartphone market.

“Nokia's partnership with Microsoft, and the continued market loyalty to Nokia among around half of South African cellphone users, means that Windows Phone will be as great a rival to BlackBerry as Android,” says Goldstuck.

In a statement from RIM, the company claims its new BlackBerry 7 devices are up to 40% faster than BlackBerry 6-based devices and up to 100% faster than BlackBerry 5 smartphones.

“Additional enhancements to this next generation BlackBerry browser have also optimised zooming and panning for smoother Web navigation and optimised HTML5 performance for incredible gaming and video experiences,” says RIM.

“Speeding up browsing addresses a major weakness in the BlackBerry experience,” says Goldstuck. “Bringing touch-screen functionality to the Bold also fills an obvious gap. A new slide-out Torch will also reaffirm its status as one of the most desirable phones on the market.

“However, the introduction of touch-only Torch options confuses it with the disappointing Storm - possibly intentionally to bury the Storm brand.”

Goldstuck argues that the new releases from RIM are unlikely to change Western market trends.

“Knowing they wouldn't touch Android, due to animosity towards Google, we would recommend that BlackBerry adopt Windows Phone as their operating system, building their messaging strength on top of that platform.

“The South African market is unique for RIM, and we will see BlackBerry market share continue to grow here for at least the coming year.”