BlackBerry has short window to prove itself
Commentary: Potential for upside earnings, though, is high
new
Jan. 31, 2013, 6:01 a.m. EST
By Therese Poletti, MarketWatch
Getty Images
SAN FRANCISCO (MarketWatch) — The new software and smartphones launched
by BlackBerry on Wednesday were a great start in its reinvention
efforts, but will they be enough to revive the company in a short window
of time?
To say that investors have been looking forward to the next generation
of products from the company previously known as Research In Motion Ltd.
RIMM
-7.84%
is the understatement of the day. Its shares have surged over 140% in
the last four months in anticipation of the rollout.
Read about BlackBerry's major launch.
One analyst, Francisco Jeronimo of IDC, aptly described the major product assault as “D-Day for Research in Motion.”
“The company has no other major options; if it doesn’t succeed with the
new platform, there are no alternatives on the hardware or software
sides,” Jeronimo wrote in a note.
BlackBerry Hub pulls notifications into one place
Head of software Vivek Bhardwaj shows off the BlackBerry Hub, a central location for all a users e-mail, facebook, tweets and more, on the new BlackBerry Z10.
Investors are hoping the new products and major software revamp will be
enough to restore the company to some of its former glory. But it better
happen fast.
“It’s not clear how much time investors will give RIM,” said Shaw Wu, an
analyst with Sterne Agee. “These products are actually pretty
impressive, but it really remains to be seen if end-users are going to
embrace them.”
Already, its shares fell 6%, as investors were trying to figure out when
they might see some tangible results from the new devices, with some
launch dates still up in the air.
“While the Z10 will be available in the U.K., Canada, and the U.A.E.
[United Arab Emirates] soon, the later launch in the U.S. in March could
be disappointing to some,” Wu wrote in a research note. “In addition,
the Q10 won’t be available until April.” He noted that prices of $149.99
and $199.99 “don’t seem competitive,” with many Android smartphones
available for $99, $49, or free. “We believe RIMM and/or carriers may
need to price more aggressively to generate interest.”
At that rate, investors won’t see much of an impact on BlackBerry’s
earnings until the company’s fiscal first quarter of 2014, which will
end in early June. (The shares will start trading under the symbol BBRY
next week.) The current quarter, which ends in early March, will also
see some sales, but the bigger impact will be seen when U.S. sales
begin.
Jeronimo of IDC is predicting that BlackBerry will mostly remain as a
favorite by corporate computer users. Part of the new BlackBerry 10
software will divide the personal and corporate element of the phone, so
that IT managers can control what they need to control and consumers
can have freedom with personal email, apps and games.
“IDC estimates that BlackBerry will continue to be a major player in the
enterprise segment, but a smaller player in the overall smartphone
market with a market share of around 5%,” he wrote.
BB10 keyboard has multiple languages, new features
Head of software Vivek Bhardwaj demonstrates the many features of the new BlackBerry BB10 keyboard.
Still, the company has a far better chance than a companies like Nokia Corp.
NOK
-3.36%
and Palm Inc.
HPQ
+0.49%
did to revive themselves, said investor Eric Jackson, the founder of
IronFire Capital. In an interview earlier this week on Yahoo Finance’s
Breakout, he said he has owned the stock since November and has what he
calls a “contrarian view.”
Watch Eric Jackson interview.
“RIM has this huge installed base of about 80 million global
subscribers... The 80 million that are still there with RIM, you have to
call them diehards,” Jackson said. “When these new phones come out,
they are going to buy.” He said the carriers want a company to become
the “third horse in this Android and iOS race,” referring to the rivalry
between phones based on Google Inc.’s
GOOG
+0.23%
Android software and Apple Inc.’s
AAPL
+0.12%
iPhone.
“RIM doesn’t have to sell many of these things for this to be a huge
home run this year,” he said, adding that Wall Street consensus
estimates are for the company to lose 50 cents a share in fiscal 2014.
”If one in three subscribers buy this thing, they get 4 or 5 bucks a
share in EPS.”
Mossberg reviews new BlackBerry
The BlackBerry has been reinvented to join the mix of today's touch smartphones. Walt Mossberg gives us his take on the new BlackBerry OS, and five important things you should know about RIM's new phones. (Photo: Research In Motion)
And so far, some early reviews of the devices and operating system are
good. David Pogue of the New York Times wrote, “Well, BlackBerry’s Hail
Mary pass, its bet-the-farm phone, is finally here. It’s the BlackBerry
Z10, and guess what? It’s lovely, fast and efficient, bristling with
fresh, useful ideas,” Pogue wrote. “And here’s the shocker — it’s
complete.”
Read Pogue’s review of the new BlackBerry.
Walt Mossberg of The Wall Street Journal was not quite as effusive, but
called the Z10 and the new BlackBerry 10 software a “radical reinvention
of the BlackBerry. The hardware is decent and the user interface is
logical and generally easy to use,” Mossberg wrote. “I believe it has a
chance of getting BlackBerry back into the game, if the company can
attract a lot more apps.”
Read Mossberg's review on All Things D.
Whether or not enough current subscribers decide they want to stick with
their devices, once known as “Crackberries” for their addictive nature,
is the big question. Attracting new customers would be a big additional
bonus, but in both cases, the company needs to start selling its
devices fast, as the window of opportunity could shut very quickly.
Therese Poletti is a senior columnist for MarketWatch in San Francisco. Follow her on Twitter @tpoletti.
Heins and singer Alicia Keys.
What would a smartphone be without Angry Birds?
Marty
Mallick, BlackBerry’s senior director of strategic business
development. It’s his job to get developers to make apps for BlackBerry
10.
Predictive text is the major feature touted in BlackBerry 10’s new on-screen keyboard.
Vivek Bhardwaj, head of BlackBerry’s software portfolio, on stage with Heins.
Heins and the Z10.
Thorsten Heins, CEO of RIM.
Yup. It’s cut. That happened.
The cutting of CrackBerry Ken’s hair.
Another video of BlackBerry fans. We get it, people still love BlackBerry.
Uh, how can we rate something we haven’t had any real time with?
RIM wants us to tell everyone we’re here. Duh, that’s my job.
The big screen has switched from logo, logo, logo, to information about features.
The masses, they await the new.
The stage is set.
Power and wired internet connections. Pretty fancy RIM. Hey Apple, take note.
And they’re letting us in. Nice size crowd.
In a weird twist of fate, no BlackBerry jam.
The press holding area. We have breakfast and a colorful hall that ends with a giant “10.” The Cults are playing.
Check
in time. The video is playing super-quick scenes. Probably to indicate
that when you use a BlackBerry 10 you’re doing so much in so little
time. Or it just looks cool.
There it is. Off in the distance. RIM’s future.
