NEW YORK--Research In Motion (NASDAQ:RIMM), which has renamed itself "BlackBerry," went all-in with its launch of the BlackBerry Z10 and Q10. Now the question is whether it can get non-BlackBerry users, especially first-time smartphone buyers, to ante up.
During his presentation here, RIM CEO Thorsten Heins highlighted the key features of BlackBerry 10, and I was impressed with what I saw, though much of the platform was previewed last year. A lot of the main elements of BlackBerry 10 are designed to appeal to existing BlackBerry subscribers. The unified messaging and contact inbox, the Hub, is at the heart of the platform and is aimed at simplifying messaging and communication. The keyboard is incredibly responsive and through gestures and swipes can predict the words users want. BlackBerry Balance segregates personal and enterprise data on devices, keeping the business data secure but separate. The new BlackBerry Messenger service has video chatting and screen sharing. And the whole user interface, dubbed Flow, is smooth, fast and responsive, even if it takes a little while to get used to.
All of these elements may be enough to help RIM shore up its base of 79 million BlackBerry subscribers, an essential part of its long-term strategy. However, I don't think that will be enough to revive RIM's fortunes or help it gain back smartphone market share.
To do that, RIM will need to either get users of other smartphone platforms, primarily Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS, to switch to BlackBerry, or the company must go after first-time smartphone buyers. Getting switchers is going to be tough because users of those other platforms have likely downloaded dozens of applications as well as multimedia content that can only be accessed on those platforms. Further, they may be tied to core services like Google Now on Android or Siri on iOS and don't want to switch. I don't think it will be impossible to get people to switch, but it will take some serious convincing through marketing and at the retail sales channel. I can't imagine retail sales reps at carrier stores steering existing Android users to BlackBerry 10, but I could be wrong.
One way RIM could get people to switch is by appealing what Strategy Analytics analyst Kevin Burden called "user fatigue" with the established platforms. "The challenge for BlackBerry now is to get to users who may be in their third or fourth generation of those platforms and say, 'Isn't it time for something new?'" he told me.
I think that's a long shot. A better avenue is going after non-smartphone users who are ready to move to a smartphone but are unsure of what they want. Indeed, around half of Americans still do not own a smartphone. RIM was vague on how it plans to entice these users. RIM CMO Frank Boulben said the company will target its marketing at "hyperconnected" users--the doers, the achievers--that the company believes make up one-third of the handset market.
"We have done extensive market research in the smartphone market and people who are going to move from feature phones to smartphones," he said at a press conference here. Of the hyperconnected crowd, he said: "You find those customers in the feature phone segment today. We are competing not only for the existing BlackBerry base but much more broadly."
Yet how, specifically, is RIM going to attract these people? What messages will it use in its marketing? How will these users be targeted in developed markets vs. emerging markets? How will retail sales reps go after them to get them to try and then buy BB10? All of these questions are critical yet were left more or less unanswered here.
Non-smartphone users have come to regard the market as largely a choice between iOS and Android. Microsoft (NASDAQ:MSFT), which has more resources than RIM, is trying to break into the market with Windows Phone, so far to middling success. Burden said that RIM's best chance to go after non-smartphone users is to appeal to their core needs on communication, which right now is limited to voice and texting.
"I think BlackBerry has an opportunity to come out and say--whether it's true or not--that when it comes to communication with your friends or extended contacts this platform is going to deliver a better experience for you," he said. "Up to this point, browsing the Web and using applications hasn't been enough to entice this user."
BlackBerry 10's core features are based around communication, so I think this approach has a shot at succeeding. As always, it will come down to execution.
RIM has pushed all of its chips to the middle of the table, betting that BlackBerry 10 can save the company. If RIM can't get non-BlackBerry users to buy into the platform, I'm not sure that gamble will pay off.--Phil