BlackBerry recently launched the Z3, a new, low-cost phone, in Jakarta, in an attempt to recover from their recent slump. The question remains whether or not the move will be successful. Over the past two years, BlackBerry has lost 36 percent of the Indonesian market, going from a 40 percent market share to 4 percent. This woeful decline can be partially attributed to Blackberry’s launch of new premium phones, an unpopular commodity in a country so heavily affected by poverty. The Z3 is a direct attempt to counter this unpopularity, as it will retail for under $200. John Chen, BlackBerry’s chief executive, has said that he expects the phone to be an enormous success, selling millions of units around the globe. The question then, is whether or not BlackBerry will be able to wrestle back its market share from companies such as Samsung and Apple and, thereby, recover from its financial slump.
Many investment advisers insist that the Z3 will not be enough to turn around BlackBerry’s ailing fortunes. BlackBerry’s 0.6 percent market share, a market share which is minuscule when compared the 78 percent market share held by the Android operating system, is often pointed out. These advisers also point to the BlackBerry 10, which was expected to restore momentum when it was released last year, but which proved to be an overwhelming failure, actually selling less units than the older models. Furthermore, many people have pointed to BlackBerry’s balance sheet, where the company continues to haemorrhage money, as an indicator of its dire financial situation. Finally, BlackBerry announced on Monday, May 5, that it would be selling the majority of its Canadian real-estate holdings to Spear Street Capital, an American investment firm. While this move is not necessarily indicative of financial problems, it certainly does nothing to assuage investor concerns over the future of the company.
However, while BlackBerry may not be able to gain back the market share they lost to Apple and Samsung, they may have the ability to recover from their financial slump by expanding in other sectors. These sectors are the financial and security sectors, both of which are sectors where BlackBerry has a traditional advantage. BlackBerry currently has the ability to encrypt messages in a way that its competitors currently cannot, and this could be leveraged by BlackBerry into significant expansion. The main obstacle to this expansion, according to ValueWalk, is the fact that, although BlackBerry’s competitors cannot compete with BlackBerry in terms of encryption quality, they far outstrip BlackBerry in terms of versatility, as they support more than one brand of smartphone.
Mr.Chen has, in fact, highlighted this very phenomenon, but he is quick to point out that BlackBerry possesses the ability to transition quickly, due to the widespread use of QNX. QNX is an operating system used by things such as air traffic control, medical systems, and, most importantly, Android’s in-vehicle system. This operating system could be the base on which BlackBerry launches is rebirth, as it would allow BlackBerry to provide security services for third-party devices, possibly making it truly indispensable in today’s age of information. Therefore, while the key to BlackBerry’s recovery from its current financial slump may not be the launch of the Z3, it could take the form of QNX in the near future.
By Nicholas Grabe