BlackBerry Bound for Bad News?

Anindya is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Analyst Gartner projects that BlackBerry’s (NASDAQ: BBRY) BlackBerry 10 (BB10) will hold less than 5% of the overall worldwide smartphone market through 2016. The firm sees the Canadian smartphone maker having an "extremely difficult" time taking on the current options of Apple's (NASDAQ: AAPL) iOS, Google's (NASDAQ: GOOG) Android, and Microsoft's Windows Phone 8.

As BB10 devices become available in the U.S. this week, Gartner analysts said enterprises must determine user demand, address bring-your-own-device (BYOD) support, forecast the health of the BlackBerry business, and decide whether to upgrade the BlackBerry Enterprise Service (BES).

3 Things BlackBerry Must Do

Gartner has identified three key impacts and recommendations for organizations to consider before adopting BB10:

  1. Firstly, enterprises should try out BlackBerry 10 and familiarize themselves with the fledgling platform before deciding to adopt. The firm acknowledged that it will be a "daunting" challenge for BlackBerry to excite users about its new platform.

  2. Second, businesses are advised to wait and watch how BlackBerry 10 plays out in the consumer market, which will likely determine the long-term viability of the platform.
  3. Finally, Gartner noted that BlackBerry has not opened its management application programming interface to support popular master data management tools. Currently, the only option for BlackBerry 10 devices is BlackBerry Enterprise Service 10. Gartner recommends that BlackBerry work to support alternative MDM tools. That would provide both Microsoft's Exchange Active Sync and the MDM camps with an easier path to support BB10 devices, even if it is only through a BYOD program.

BlackBerry CEO Criticized Apple

In an interview with the Australian Financial Review, BlackBerry CEO Thorsten Heins said that Apple’s iPhone is not the state-of-the-art smartphone it once was. In fact, it’s starting to look a little dusty: "The rate of innovation is so high in our industry that if you don’t innovate at that speed you can be replaced pretty quickly. The user interface on the iPhone, with all due respect for what this invention was all about, is now five years old."

BlackBerry has a challenging task ahead of itself as the company tries to reverse its declining fortunes in the smartphone market. It appears that while BlackBerry is struggling for market share, focused on executing its turnaround plan, it’s not above raising it to talk smack about its rivals.

Apple’s iOS Leading in Enterprise Market

Apple’s iOS is consolidating its grip on the enterprise market and taking share from Android, according to customer data from enterprise file sharing and hybrid cloud storage company Egnyte, reports TechCrunch

The data, shared directly with TechCrunch, covers 100,000 of Egnyte’s paying customers over the last year-and-a-half, tracking which OS they are using to access its services on mobile devices and also splitting out iPhone and iPad use. The numbers look strong for Apple, with the iPhone especially growing its proportion of users since the second half of 2011 to-date -- perhaps helped by the halo effect of iPads arriving in the enterprise and persuading business folks to trade their BlackBerrys for iPhones. Egnyte’s data doesn’t specifically refer to BlackBerrys, but it does show Apple taking share away from Android.

Egnyte’s data on enterprise users’ preference for iPhones tallies broadly with data from mobile device management company Good Technology, covered recently by CITEworld. Good reported even higher percentages for iOS -- with nearly 77% of devices activated by its corporate customers in Q4 2012 powered by iOS, up from 71% in the fourth quarter of 2011. Good also found Android’s enterprise mobile shared declining, dropping to 22.7% in Q4 2012, down from 29% in Q4 2011. (It also tracked a 0.5% rise for Windows Phone.)

Returning to Egnyte’s data for 2012, almost a fifth (19%) of the Android traffic was generated using a Nook tablet -- so despite the iPad’s popularity with business users, some enterprises are evidently not immune to the lure of using cheaper tablet hardware.

The Bottom Line

Although BB10 presents a modernized new platform based on touch technology, the question is whether the new platform is sufficient enough to motivate the buyers to choose BlackBerry over existing platforms. Much will depend on how effective BlackBerry's marketing will be, and how much money they can spend to excite customers. For now, investors should wait and watch.

Anindya Batabyal has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus