BlackBerry's unsurprising top-level shuffle could give the company the impetus it needs to make the most of its local operation, using it as a springboard into Africa and deepening its share of the market.
Yesterday, the troubled device-maker, which has ditched plans to sell itself, announced three top-level departures only weeks before it will report its next quarterly results. BlackBerry said its CFO, COO and chief marketing officer are leaving.
This is the first top-level shuffle under new CEO and chairman John Chen, who replaced Thorsten Heins earlier this month. Chen has been credited with turning Sybase around before it was sold to SAP a few years ago.
Still popular
Locally, BlackBerry has been through its own changes, as Yudi Moodley joined the company a month ago as its new Africa MD, replacing Alexandra Zagury, who will take up a new role as BlackBerry MD for the UK and Ireland.
Moodley says BlackBerry is in the midst of a significant and ongoing turnaround effort. "That requires making difficult changes to the way we operate and how we develop new products and services.
"By flattening management, the goal is to focus intently on the segments at which BlackBerry excels, and provide those teams the support and resources they need to move swiftly to bring innovative products and services to market."
Moodley adds, however, that its commitment to its customers remains unchanged. He points out that the local business unit is aligned with the company's overall global strategy and direction, and 2014 is the year its roadmap will be realised and when it must execute on its plans.
These are largely focused on its popular BlackBerry Messenger platform, as well as on the enterprise, its QNX operating system - upon which BlackBerry 10 is based - and the launch of new devices.
Arthur Goldstuck, MD of World Wide Worx, says BlackBerry is still growing in SA, where it is seeing "tremendous" appetite at the entry level. Currently, BlackBerry has about 5.5 million handsets in the local market, and is the most prevalent smartphone, and the second-most popular handset overall behind Nokia.
The results of World Wide Worx's Mobility 2014 survey show Nokia has a 44% market share among adults in local cities and towns. Nokia's share has dropped from 50% in the past 18 months, while BlackBerry gained from 18% to 23%, and Samsung clawed up to 19% from 18% of the local market, says Goldstuck. Nokia is expected to continue losing ground, while Samsung and BlackBerry will gain.
Globally, BlackBerry's market share is expected to drop from 2.7% this year to 1.7% by 2017, says the IDC.
Vital geography
Moodley says SA and Africa remain key markets for BlackBerry, and the smartphone brand remains strong across the continent.
SA is one of the few markets globally where it is experiencing growth, says Goldstuck. Yet, the device-maker must tread carefully as it has a habit of keeping the market in the dark.
This has been its main weakness, and has filtered through to the local market from head office, says Goldstuck. In addition, the South African arm has not historically been given the space it needs, which is an indictment on its previous management. A lot depends on what BlackBerry's head office does, he comments.
BlackBerry is facing competition in its "bastions of strength", says IDC. While it expects smartphone shipments to Africa to double in the next four years, BlackBerry will hold the second spot until 2014, after which it will be overtaken by iOS, it predicts.
BlackBerry's global declining market share is due to "tepid BlackBerry 10 reception" and "emboldened" competition that is eating at BlackBerry's share in Africa, Latin America, and the Middle East.
Goldstuck says BlackBerry must clarify its marketing and give SA room to manoeuvre. Although BlackBerry has outlined its strategy, there has been no medium-term clarity, and the local office has been on hold.
Ovum analyst Richard Hurst says while there may not be top-level changes locally, there will probably be a shift in strategy as this filters down from Canada. He says it remains to be seen what BlackBerry will do with its emerging markets.
Hurst says the local office needs to provide clarity, sooner rather than later, as it can still be used as a springboard into Africa, aiding the company's growth. However, he cautions "the Chinese are coming" with their own devices and functionality.
Moving forward
Although BlackBerry announced James Yersh will replace Brian Bidulka as CFO, it has not named replacements for the other two positions. Goldstuck says Chen was expected to stamp his own leadership on the business and bring in people aligned with his thinking. He notes Chen may feel the old leadership is part of the problem.
If that is the case, more high-level departures can be expected, says Goldstuck. In addition, the uncertainty around the company could see staff exiting. BlackBerry also announced Roger Martin, who had sat on its board from 2007, had resigned.
Chen says he will build on BlackBerry's core strengths and, in conjunction with management changes, will continue to align the senior management team and organisational structure, and refine its strategy.
Goldstuck says it is notable none of the changes involve senior technical staff, which indicates the core issue is how BlackBerry has gone to market, and not its technical platforms.
"I look forward to working more directly with the talented teams of engineers, and the sales and marketing teams around the world to facilitate the BlackBerry turnaround and to drive innovation," said Chen.
"BlackBerry has a strong cash position and continues, by a significant margin, to be the top provider of trusted and secure mobile device management solutions to enterprise customers around the world."
However, Vestact analyst Sasha Naryshkine says the question is whether BlackBerry can shake it up, which he doubts. He says Chen "must do anything in his power to plug a leaky ship".
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