Research In Motion will reach its “natural end”, despite today’s BB10 launch

Research In Motion’s imminent launch of the BlackBerry 10 (BB10) is widely seen as make or break time and Jan Dawson, Chief Telecoms Analyst at Ovum, believes the new devices will provide “a temporary boost in performance but no salvation”.

Dawson believes in the longer term Research In Motion (RIM) will return to its recent patterns of decline.

HumanIPO reported yesterday that Gartner’s Vice President of Research, Phillip Redman, believed this week could prove to be the beginning of a recovery for the Canadian manufacturer.

But Dawson said: “RIM continues to face the twin demons of consumer-driven buying power and a chronic inability to appeal to mature market consumers. There is nothing in what we’ve seen so far of BB10 that suggests it will conquer the second of these demons, and the first is utterly out of RIM’s control.

“We don’t expect a speedy exit from the market. With no debt, 80 million subscribers and profitability in the black in at least some recent quarters, the company can continue in this vein for years. But its glory days are past, and it is only a matter of time before it reaches a natural end.”

Dawson explains the trend of “Bring Your Own Device” (BYOD) seems to have hit RIM the hardest, added to that in choosing their own devices employees in Europe and North America tend to choose devices other than BlackBerry.

Although true for North America and Europe, the trend is different in Africa where the Canadian manufacturer continues to thrive. It is not believed, however, that the sales coming out of the continent are sufficient to keep the company afloat.

Dawson said: “There are bright spots in emerging markets, where BlackBerry devices have become a middle-class status symbol as they once were in mature markets. But these devices are low-priced and based on BB10’s predecessor BB7, which is destined for the scrap heap in the medium term.

“As developers shift their focus to BB10, it will be harder and harder for RIM to maintain the appeal of the older platform in these markets, especially since it is unlikely to release new hardware running BB7.

“BB10, meanwhile, requires high-end specs that will be impossible to deliver at such price points in the near future. Therefore, the current popularity of BlackBerry in emerging markets is likely to be short-lived.”

Given the fact half of BlackBerry sales are to existing customers upgrading their devices, and the other half to new customers it would appear wise for RIM to continue to pursue a “customer retention” strategy.

Posted in: Mobile

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