If new BlackBerry has no buyers, does it exist?

Aiming for third place behind Apple and Android smartphones doesn't seem like a winning strategy.

By TheStreet Staff Mar 26, 2013 12:39PM

Businessman in car with smartphone copyright Image Source, Image Source, Getty ImagesBy Renee Butler thestreet logo

 

BlackBerry's (BBRY) new smartphone hit the street March 22 to little fanfare. AT&T (T) didn't even put up signs or floor displays in several locations, including at least two stores in Manhattan.

 

The new Z10 smartphone was unveiled nearly two months ago and is just as much a technology upgrade as an operating system improvement. The new smartphone is supposed to be BlackBerry's answer to Apple's (AAPL) iPhone and Google's (GOOG) Android phones. The company is vying for third place, meaning its direct competitor are phones that run the Windows 8 operating system.

 

That's all well and good, but BlackBerry is taking serious chances with this -- and it chooses to drop the phone so shortly after Samsung launches its Galaxy S4. The new Galaxy is direct competition for Apple and Google -- what was BlackBerry thinking? 

 

OK, let's take a look at BlackBerry for a second. The company's stock closed Monday at $14.23, down almost 5%. There are rumors that "an established partner" just ordered 1 million BlackBerrys, and speculation says it's Brightstar, a company whose business is distributing smartphones to retailers.

 

But the market doesn't seem encouraged. Goldman Sachs downgraded the company on Monday to "neutral" from "buy," and set a price target of $17.

 

There is always the question as to whether BlackBerry has the chops to make a new operating system work. The company had the lion's share of the early (business) smartphone market -- but that was then.

 

The BlackBerry brand fell out of favor as more people turned toward touch screens and phones that act more like personal assistants than telephones, and that trend has only accelerated. Late last year, the company lost 1 million customers in just one quarter, prompting a 48% drop in revenue in its fiscal third quarter. 

 

BlackBerry still has some standing in government agencies, but even that is on the decline. In August 2009, more than 77% of federal managers carried a BlackBerry. By September 2011, that figure had dipped to less than 50%. In May 2012, National Oceanic and Atmospheric Administration program manager Stefan Leeb said his group was no longer buying BlackBerrys and that there was an intention in place for his agency to be off those systems by June 1. And NOAA isn't the only government agency with a change of heart.

 

In October, U.S. Immigration and Customs Enforcement opted to provide agents with Apple's iPhone, saying: "The devices provide critical, mission support services for ICE personnel and provide modern communication and personal computing services. Examples are: call waiting, call forwarding, three-way calling, caller ID, voice mail messaging, geospatial services, and picture/video capabilities."

 

Plus, with the launch of the BlackBerry Z10, the company is revamping its fees, allowing customers more flexibility in choosing which services they want -- but is the launch of a new product right after losing so many customers really the best idea?

 

It seems more likely that BlackBerry is clutching at straws.

 

The BlackBerry Z10 offers very little relative to the competition. The new smartphone weighs almost an ounce more than Apple's iPhone, and marginally more than the Samsung Galaxy S4 despite being smaller than the latter and only slightly bigger than the former. It has limited internal storage, at just 16 GB, and offers no greater speeds or resolution than its rivals. Even its icons are small -- which could make the phone less user-friendly.

 

Moreover, BlackBerry is already behind the curve in some ways. Its products do not offer some of the features that are rapidly becoming standard in the smartphone market -- meaning it is already out-of-date. 

 

Take indoor mapping, for example. It likely will be the next big craze in mobile technology. Google currently offers the capability but only in some locations, such as airports, malls and sports venues. Apple only just entered the game. Apple recently paid around $20 million to acquire indoor-GPS company WifiSLAM, which could mean that an iPhone update is coming. If you are launching a new phone with a new operating system and you really need to make it work, wouldn't you try to offer a product that has features your competitors don't?

 

I really doubt the abilities of any company that aims for third place, even if there is a company out there willing to buy a million phones at once.

 

I say, get out now -- or at least soon. I highly doubt BlackBerry is even going to reach Goldman's $17 target. The company's stock has a 50-day moving average of $14.46. Anything over that, sell. There are better places to put your money.

 

At the time of publication, the author had no position in any of the stocks mentioned.

 

 

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30Comments
Mar 26, 2013 1:18PM
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"There is always the question as to whether BlackBerry has the chops to make a new operating system work."
Umm ...hello?, it's already working, and has been working on PlayBook for two years. QNX has been working since 1982.

"is the launch of a new product right after losing so many customers really the best idea?"
Uh, no of course not - they should just roll over and die.

"it chooses to drop the phone so shortly after Samsung launches its Galaxy S4."
Actually the phone was "dropped" January 30th.

"The BlackBerry brand fell out of favor as more people turned toward touch screens and phones that act more like personal assistants than telephones"
.....contrasted with:
 "The [iphone] devices provide critical, mission support services for ICE personnel and provide modern communication and personal computing services. Examples are: call waiting, call forwarding, three-way calling, caller ID, voice mail messaging, geospatial services, and picture/video capabilities."
 All of which Blackberry excels at  (t-e-l-e-p-h-o-n-e), especially secure communications.

"OK, let's take a look at BlackBerry for a second."
Yes, that is clearly about how long you've looked at it. ..psst.. (Blackberrys have touchscreens now and have worked as Personal Assistants long before the iPhone was a gleam in Steve Jobs *i* ) ...shhh!

"I really doubt the abilities of any company that aims for third place"
unless it's Windows 8?  - everyone else should aim for first place, second place, fourth place or drop dead ... WTF?

"If the new Blackberry has no buyers, does it exist?"
As of yesterday, The new BlackBerry is the number one selling smartphone on Amazon . Check it out.

"It seems more likely that BlackBerry is clutching at straws."
It seems more likely the author is clutching at straws. Please don't write about something you know nothing about, just to express your bias and hate. At least do some research.

Geez....why did I read this inane dribble.








Mar 26, 2013 1:35PM
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"It has limited internal storage, at just 16 GB, and offers no greater speeds or resolution than its rivals." lol. unbiased critic conveniently failed to mention that BB10 is expandable. 

 

"Its products do not offer some of the features that are rapidly becoming standard in the smartphone market -- meaning it is already out-of-date." lol. maybe because BB10 runs on QNX which allows it to become the new standard of mobile computing, not just an evolutionary gadget smart phone.

 

"I say, get out now -- or at least soon. I highly doubt BlackBerry is even going to reach Goldman's $17 target."  Let's hold him to his word, shall we?

 

.. what a joke.

 

 

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I have my new Blackberry and it is great.  I love it.  
Mar 26, 2013 5:50PM
Mar 26, 2013 7:30PM
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This article is so full of crap I can't even respond through typing... I would love to go to these people's and everyone else that is "against" blackberry and tell them face to face how well blackberry has worked for me and several others. It just goes to show how much everyone just wants to fit in and do/buy whatever their friends get. The only reason iphone's are so popular is because it was the first phone of its kind to come out and obviously everyone went for it and gave into all the apps and other unnecessary things it offers. As for android I could try, but I have no reason to stop buying blackberry so I have not and have no personal experience to share about it.

On serious terms though, where did the original phone go? I thought phones were used for communication. Not for digital finger painting and digitally sending a check to your bank.... get off your lazy butts and go to the bank yourself!

But anyways, people really need to give blackberry a chance. The only reason it's not getting bought as often is because of articles like these with false information which reaches every gullible human being's ears who base all their information on biased critic reviews instead of PERSONAL EXPERIENCE. I love blackberry and I will continue to buy them.

Literally the only thing I can complain about blackberry is that they do not have skype (but supposedly are working on it) and a few other necessary apps. But the silly stuff I can live without.
Mar 26, 2013 9:26PM
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This is literally one of the worst articles I've ever read. It says that the new Galaxy is a threat to Google and Apple. The Galaxy runs Android (Google).
It points to limited storage, at 16GB, which also isn't true, it's expandable. The iPhone, and Nexus 4 (a popular phone) have the same storage capacity and no option to expand.
Indoor mapping? No one cares. I'm not even a Blackberry fanatic, nor an owner. Just someone who is up-to-date with technology. No one cares about indoor mapping. That was the only "standard feature" offered as an example of being behind the curve. And with the Z10's specs, it is not behind the curve.
This writer just sounds miserable.

Mar 26, 2013 7:46PM
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I stopped reading after "its direct competitor are phones that run the Windows 8 operating system." When you can't even get the OS names straight, it tells me that whatever you have to say is equally worthless.
Mar 26, 2013 11:30PM
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Whoever wrote this article is clueless. They do realize the German government has purchased 5,000 phones with an option for 40k. The 1 million cell order isn't a rumor its a fact. BlackBerry has also had success launches in Canada the UK UAE India Indonesia etc. You will see plenty more businesses and governments making major orders soon. 
Mar 27, 2013 12:47AM
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Another apple fan boy who didn't take the time to find out what this phone can do. Why he is so eager to see blackberry disappear is a mystery......unless he made a bet against blackberry. the smartphone market is rapidly expanding and as people want more security and safety (I phones have been catching on fire and have holes in security - android is worse) blackberry will regain market share. with 30% of the shares being shorted it's no wonder blackberry gets so much negative press - most of it just uninformed opinion, some of it straight lies.
Mar 26, 2013 5:51PM
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It looks like a really nice phone from what I've seen but they waited way too long to make this move. If they had done this a couple of years ago they would be right up there with everyone else. They just waited too long to make their move and they may pay the ultimate price for it. That remains to be seen but things definitely aren't looking good. They barely even had an ad campaign for this phone. I don't recall seeing a single ad for it lately. That also wasn't a very smart move. The only reason I know they came out with a new phone at all is that it was demo'd on the Today Show and I happened to be watching that morning.
Mar 27, 2013 2:22AM
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This article reads like a FOX News story. It's full of untruths stated as facts. ICE dod NOT opt for iPhones. They only did a feasibility study and RFP. NOAA no longer purchased the old BlackBerries because they were also testing and waiting for the new platform. Many Federal managers may carry an iPhone but it's a PERSONAL phone nor allowed on the Federal Networks. iPhones are not FIPS certified. GSA will not allow any agency to purchase non FIPS certified phones.
Mar 27, 2013 12:15AM
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i thought the Galaxy was a part of Google..it runs Android....?
Mar 26, 2013 7:02PM
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I just got my Z10. Plugged it in to transfer "all data" from my earlier Torch version. Logged into BB Id and started following on screen instructions. At the end the BB Id COMPLETELY WIPED OUT ALL MY DATA ON THE TORCH AND ALL EMAILS ON MY 3rd PARTY SERVER for which I pay $100/month. Called AT&T to fix problem no luck. AT&T connected me to RIM. Very nice rep tried helping. 4hrs later + earlier 2hrs with AT&T I was basically told I was SOL and that I'll need to manually recreate over a 100+ Emails. After 6+ wasted hours and being told to " take a running jump of a short plank...I was then told to call 877 255 2377 if I wanted... Worst still this morning I get an Email from both BB & AT&T asking me if I was satisfied...
Mar 26, 2013 5:53PM
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I like the Blackberry and would like to get another but for the price of this thing, I'm not sure if its going to be worth it.  I loved the one prior to this one but the price $2000.00?  They must be kidding but it looks really sleek and nice but I guess if you can afford a $2000.00 phone, you can afford a butler to answer it for you.  Good luck but I may have to move on to another phone.  Att is my carrier and I have no faith in them - I can't have a phone that I have no faith in either. 
Mar 26, 2013 6:45PM
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I like blackberry, but I will have to switch in order to communicate with my family and friends the way they like to communicate - face time and Skye. I'm still upset, too, that I got swindled into buying a playbook on the premise that Skye was coming and it never did.
Mar 26, 2013 6:36PM
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The fact there are only 3 comments and they are obviously from RIM workers or fanboys tells you no one cares. I will go back to reading this on my DROID bow down to the google RIM fanboys; you had your day in the sun eh.
Mar 26, 2013 5:14PM
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The entire company has been obsolete for a decade +.  Why on earth do these moron "news" articles still exist?
Mar 26, 2013 5:00PM
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Hahaha, love the title,

 

Good bye Blackberry, I hardly knew thy.

 

And old people please, I know the blackberry was a good friend in the early 2000's, but it does not hold up.  That is not an insult against you, so please tame the rage you are now feeling.  It does not mean you are obsolete, only your blackberry's

Also,

Go look at the comparison videos online, not only does the blackberry z10 lose every competition, it freezes up doing basic tasks in every video I have seen to date.

 

 

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