News Column

RIM Goes from X to Z with New BlackBerries

Jan 29 2013

Andy Goldberg


The tech world is filled with tales of giant companies that withered and died as they were leapfrogged by new technology, but few have been superseded quite as spectacularly as Research in Motion Ltd (RIM), which is hoping that a pair of new smartphones to be unveiled Wednesday would save the Canadian company.

The Blackberry Z10 and Blackberry X10 are the culmination of RIM's desperate years of effort to play catch-up with the smartphone leaders Apple Inc and devices operated with Google Inc's Android system.

And while no one is predicting that RIM would return to the preeminent position it enjoyed as the world's most popular smartphone before the 2007 launch of the iPhone, many investors were upbeat that the new devices offer a solid foundation for the future.

RIM certainly has a long way to go. Back in 2008, when the iPhone was still new on the market, BlackBerries accounted for 46 per cent of all smartphones shipped. They had become a cult device used by everyone who was anyone from US President Barack Obama to Oprah Winfrey.

Users joked about using their "CrackBerry," so addictive was the feeling of being able to access emails on the go. Just as importantly, corporate information-technology managers loved the device for keeping workers reachable at all hours and offering a secure way to manage their communications.

But Apple showed that mobile devices could do far more than just transmit emails and instant messages. The result was catastrophic for RIM. Last year, its share of smartphone sales in the United States fell to just 2 per cent. Chief executive Thorsten Heins, 55, is betting that RIM's latest devices, based on the widely praised new operating system BB10, could reverse that trend. Investors were also optimistic, sending the company's shares up 178 per cent since late September.

Part of optimism is due to speculation that the ailing company would be bought out by an emerging smartphone maker like Lenovo or Huawei.

But there is also genuine excitement over the devices themselves - not only from corporate IT wonks, but from snarky gadget enthusiasts who are generally unimpressed by anything other than the shiniest, smoothest and coolest devices ever invented.

"Sorry Apple, the Blackberry Z10 is hotter than the iPhone," wrote Jesus Diaz in a headline on the gadget site Gizmodo.

He went on to rave about the phone's design - it is the first smartphone to have no physical buttons - and its software.

"I've always hated BlackBerry phones," he wrote. "Disgracefully ugly bricks they were - until the BlackBerry Z10. The BlackBerry Z10 is hot. Truly beautiful, elegant hardware."

But will that be enough to halt RIM's decline?

Jan Dawson, the chief telecommunications analyst at research firm Ovum, was not persuaded, noting that the market has shifted away from RIM in two key areas.

"Companies are no longer buying the majority of smartphones sold today, and individuals overwhelmingly choose devices other than BlackBerries when they make buying decisions," she said.

The new devices offer too few benefits to lure users from their iPhones and Android devices but may be attractive to the 80 million plus existing BlackBerry users who are long overdue for an upgrade.

"We don't expect a speedy exit from the market; with no debt, 80 million subscribers and profitability in the black in at least some recent quarters, the company can continue in this vein for years," she said in a research note. "But its glory days are past, and it is only a matter of time before it reaches a natural end."

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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