Can a Rimless Blackberry Avoid Extinction?
Canada-based Blackberry launched its hotly anticipated line-up of revamped smartphones and surprised markets by renaming itself after its star product Blackberry, but investors were unimpressed as its stock slumped 12 percent. Now analysts tell CNBC the company has six to 12 months to avoid being stamped out by tough competition.
"They have around six to 12 months to prove themselves. This is the last chance for them to rescue themselves. We should give them credit," said Bryan Ma, associate vice president at technology consultancy IDC's Client Devices research group .
The first devices in the new crop of BlackBerrys will be called the Q10, which will feature a physical keyboard like previous versions of the phone, and the Z10 will have only touch-screen keyboard. They will run on a redesigned operating system called BlackBerry 10, which the company began working on after buying QNX Software Systems in 2010.
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The technology industry had been hotly anticipating Blackberry's next move and the launch of its touch-screen keyboard product the Z10 was perhaps the most significant as it represented a step away from its typical design with physical keyboard and directly competes with Apple's iPhone and Samsung's Galaxy smartphones. The company also announced the appointment of international recording artist Alicia Keys as creative director, in a blatant attempt to revamp its image and win favor with a younger demographic.
Although analysts agree Blackberry has impressed the market with its clear recognition of its mistakes and desire to turn round its image, many voiced concerns over whether it will be able to match the intense competition.
"It certainly has given Blackberry a shot, but whether it will be successful is another question. The launch of the smartphone range keeps them in the game, they are not eliminated yet," said Ma.
The Make or Break Factor
According to Ma, the 'make-or-break' factor industry participants were waiting for was Blackberry's application offering.
In Wednesday's announcement the group boasted 70,000 applications, a greater number than Apple and Samsung, but the range lacks several iconic "Apps" including Instagram and Netflix, an omission that will negatively impact the business, added Ma.
"We were disappointed to see there were not as many of the critical applications revealed," said Ma. "If Blackberry is trying to keep from bleeding further they need to address their connection with their user base."
Shalini Verma, principal analyst at Gartner's Consumer Technology and Markets' team, also highlighted the disconnect between the firm and its user base as a crucial issue for Blackberry.
"They are attempting to hit the reset button and have recognized that they need to change the way they are viewed by the world. For Blackberry, it is a question of addressing negative brand perception. They are playing catch up, but it is a good catch up," she said.
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Blackberry currently has a rough 5 percent share of the smartphone market, according to IDC, and a smaller percentage of the global mobile phone market worldwide.
"With a market share of around 5 percent of the smartphone market, you could argue they have already hit the bottom. It is a question of how the new product will do. In a year's time we will know whether they will be sticking around," he said.
"Cost will be crucial as they will need to come in at the right price, especially within emerging markets," she said.
Verma pointed out that Blackberry will never be able to compete with the likes of Apple, but has the potential to build share in markets where it has less penetration, like the U.S., by changing its brand perception.