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BlackBerry shakeup: Too little, too late for marketers?

BlackBerry

Fairfax wants to take BlackBerry private

BlackBerry maker Research In Motion's effort this past weekend to dig itself out of a hole by replacing the top leaders may not warm the hearts of marketers looking to place bets on mobile platforms that will pull their weight through this decade.

The company is trying to allay marketers as well as shareholders fears that BlackBerry is no longer relevant by replacing co-CEOs Mike Lazaridis and Jim Balsillie with Thorsten Heins, as the company’s new president and CEO.  However, RIM’s issues raises the question of whether or not marketers should continue to put their resources toward BlackBerry or focus on growing mobile operating systems such as Android and iOS.

“The change in management is a belated reaction to a deeper seeded problem that has been manifesting itself over the pasts couple of years, as smartphones from Android and Apple have steadily grown in the consumer and enterprise market,” said Noah Elkin, principal analyst at eMarketer, New York.

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“The lack of momentum for BlackBerry on devices and the operating system front creates momentum away from the platform because customers aren’t sure about its future prospects,” he said. “The longer BlackBerry delays in delivering new devices and software, the worse of a predicament it ends up being in.”

BlackBerry strategy
With all of the questioning of whether RIM and BlackBerry will survive, marketers have their own questions. 

Should brands and retailers keep the BlackBerry platform top-of-mind? Should marketers even waste their time developing applications and mobile advertising campaigns geared towards BlackBerry users?

The answer is yes, for now. Regardless of RIM's failure over the last couple of years, the company still has approximately 75 million active subscribers, according to NPD Group. 

According to NPD Group's research, RIM's smartphone market share in the United States was just 10 percent in 2011. Comparatively, RIM had 44 percent market share in 2009.  

Although market share is declining, RIM still has a pretty large audience on mobile and marketers that do not target this segment of wireless subscribers will miss out. This is especially true for business-to-business companies looking to target professionals. 

Consumers have been trading in their BlackBerrys over the years for flashier, touchscreen devices such as Apple's iPhone and the line-up of Android-enabled phones. However, the majority of business professionals still rely on their BlackBerrys for accessing emails and conducting other mobile activities, making the platform a must for the marketing mix of B2B companies. 

So even though BlackBerry may not be doing that well right now, there is still hope. There is an important audience to reach on the platform and that may be what will save RIM. 

However, the opportunities on the Android and iOS platforms supersede those for BlackBerry and marketers know this. Therefore, more dollars will be placed on developing apps for Android and iOS and marketers will spend more on advertising on these platforms as well. 

Reassuring marketers
One of the challenges facing RIM is that it promised devices built on the new QNX platform but failed to deliver them on time. The company now says the first QNX devices will become available in the fall. 

With RIM's market share already in decline, this news of the delay combined with an executive shuffle that is failing to impress, leaves marketers unsure about what kind of resources they should invest in the BlackBerry ecosystem.

“RIM is putting marketers in a difficult situation because no one knows what to do,” Mr. Elkin said. “Do you hold off or do you continue to invest in the next platform – it creates instability in the marketplace all around.

“BlackBerry will have to work hard to reassure marketers and developers that they should stick with the platform,” he said. “Marketers will probably head toward the platforms that are noticeably growing, which are Android and iOS."

Part of the problem is that putting Mr. Heins, who was previously the company’s chief operating officer for product and sales, at the helm of the company is not being viewed as a bold enough move.

“Both CEOs have stepped down but remain on the board and the person they elevated was a former COO – this doesn’t represent a significant shift in terms of their approach,” Mr. Elkin said. 

“I think there are probably a lot of people out there that would have liked to have an indication of a more radical shift in strategy and approach,” he said.

In order for more retailers, brands and marketers to include the BlackBerry platform in their mobile marketing and commerce initiatives, RIM will need to do a complete 360 when it comes to its strategy. 

Showing momentum

RIM said its PlayBook 2.0 will ship in February and that it is in the process of recruiting a new chief marketing officer. 

In its most recent results, the company reported revenue of $5.2 billion, which is up 24 percent from the prior quarter, and a 35 percent year-to-year increase in the BlackBerry subscriber base, which is now more than 75 million.

In recent data from NPD, BlackBerry had a 4.5 percent share of the smartphone market in December 2011, down from 7.7 percent in October. Android’s share was 46.9 percent and iOS 44.5 percent.

It is possible the moves announced by RIM over the weekend are just the first step toward a broader change in direction. However, RIM needs to act fast if it is to recapture market share and show some momentum, possibly by partnering with a company such as Amazon on content. 

“Replacing the leadership isn’t all they need to do,” said Carl Howe, research director at Yankee Group, Boston.

“I don’t think the work can wait until fall to regain their position in the smartphone space,” he said. “If RIM isn’t introducing new products, it has to show some momentum.”

“We recommend that they should probably look at a partnership with Amazon. They need a lot more momentum on the content side.”

On sale
It has also been suggested that RIM could look to sell the company or license the BlackBerry hardware.

The move to put a new CEO in place could indicate the company is looking to try to increase value for the company in preparation for such a sale as much as it is a signal of a shift in strategy.

“On one hand, they are definitely attempting to erase the stigma of the last couple of years with the leadership change but on the other hand, having an insider step up to the plate instead of someone from the outside raises the question of whether or not they will actually go so far as selling the company in part or in whole,” said Francis Sideco, senior principal analyst for consumer and communications at IHS, El Segundo, CA.

“Regardless of whether or not they plan to sell, one thing is clear, in order to do maximize shareholder value in either case, RIM needs a couple of big wins this year." he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Manufacturers, Research In Motion, BlackBerry, Mike Lazaridis, Jim Balsillie, Thorsten Heins, eMarketer, Noah Elkin, Yankee Group, Carl Howe, IHS, Francis Sideco, mobile marketing, mobile

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Comments on "BlackBerry shakeup: Too little, too late for marketers?"

  1. Kelly Dundas says:

    January 24, 2012 at 10:41am

    Granted RIM has made mistakes, but I'm still at a loss to explain why your publiation seems to loathe them so much.

    And since when, in the middle of a recession, did 75 Million primarily B2B subscribers, suddenly become not worth pursuing as per the comments in the article? I'd think marketers would be salivating at the chance. Weird.
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