By Cyrus Sanati
FORTUNE -- Blackberry's decision to make its free messaging service, BBM, available on other mobile phone platforms is a Hail Mary play for a damaged company that pretty much has nothing to lose at this point. By giving away the stickiest feature available to Blackberry's dwindling consumer base to Android and iOS users for free, the company is hoping that it will be able to expand, or at the very least maintain, its once lucrative ecosystem.
It is extremely easy to bash on Blackberry (BBRY) these days. The bunglings of its former management team over the last five years will probably be studied in business schools for generations as how not to do just about everything. But Blackberry is on an upswing of sorts at the moment. Its stock has more than doubled from its lows hit last year, and after two years of development (light years in the tech world) the company is "back in the game" with the launch of its new operating system, Blackberry 10, and a few new handsets, the Z10, Q10, and the recently announced Q5.
Yet despite the recent optimism over the launch of the Blackberry 10 series, the company will almost certainly continue to lose market share in the crowded consumer hardware space to rivals that use Google's (GOOG) Android platform. Phones shipped with the Blackberry operating system made up just 2.9% of mobile phones sold in the first quarter of this year, down 35% from last year, according to new sale numbers released by IDC on Thursday. Phones running Microsoft's (MSFT) Windows operating system outsold Blackberry for what appears to be the first time, capturing 3.2% of the market. But phones running either Android or Apple's (AAPL) iOS, captured 92% of all mobile sales -- with Android garnering 59% of the total market, an 80% increase from the same time last year. With that, Android now runs on 75% of the world's smartphones.
To be fair, those first-quarter sales numbers just reflect eight days of sales for the new Blackberry phones in the U.S. and just a couple of months of sales in Canada. Nevertheless, the public's lukewarm reception to the product -- no one was camping out for the new Z10 -- isn't encouraging. The phone has reportedly passed the 1 million shipped mark in its first quarter of launch, which isn't bad, but isn't great for a company with such huge brand recognition. By contrast, nearly 5 million iPhones were sold in the first week of its launch back in September.
There really isn't much you can do on a Blackberry that you can't do on an Android phone these days. There aren't a bunch of must-have apps that run exclusively on Blackberry, for example. Indeed, Blackberry seems to have surrendered the app development space to Google as it considers the new Blackberry 10's ability to run Android app clones as a major selling point.
But there is one consumer-focused feature that Blackberry offers that no other handset maker or mobile platform has -- its Blackberry Messaging Service (BBM). The service allows Blackberry users to send and receive messages, share files, and even exchange music with other Blackberry users without incurring special messaging charges from their wireless carrier. It has proven to be very sticky in places like Indonesia, Haiti, and Nigeria where wireless service is unreliable.
So imagine the confusion when Blackberry announced this week it was opening up BBM to both iOS and Android users through a free app that will be made available this summer. It seems odd that Blackberry would give up its only truly sticky consumer-focused feature. Some in the geek media called it "surrender," while others saw it as a great move by the company to open itself up to the rest of the mobile community.
The move seems more akin to a company spinning off one of its divisions than anything else. BBM, with its 60 million users, is arguably the most buoyant thing in Blackberry's sinking consumer mobile division. If it remained attached to the ship it would surely drown. But allowed to roam free, BBM could possibly survive as a separate entity -- a slim chance, but a chance nonetheless. Survive as what? If BBM attracts enough iOS and Android users it could eventually become a sweet advertising portal for the company -- launching Blackberry as a player in the mobile advertising market. It could also possibly morph into a premier messaging app for companies who want to monitor employee communications.
But in order for that to happen, Blackberry will need to overcome an already saturated messenger app market. Here, scale and location matter. Texting and data plan prices in the U.S. have dropped so low you will be hard pressed to find anyone using a messaging app just to save on domestic text messaging fees. That may not be the case in other countries, but there, people are already using messaging apps like WhatsApp, Viber, and Skype. BBM touts its ability to set up Group chats of up to 30 people, but WhatsApp can do that and so can GroupMe, which is all the rage on college campuses these days. Most of these third-party messaging apps on all mobile platforms so they are ahead of the game with hundreds of millions of users. Unlike BBM, these apps don't require clumsy "pin" numbers to talk with other people; rather they just sync up easily to your phone's contacts and seek out those who have already downloaded the app. Unless Blackberry introduces some amazing new features, it will be tough, if not impossible, to get people to switch to BBM.
Nevertheless, BBM does have a couple things going for it that other messaging apps don't. First it has scale in the third world, which is the fastest growing market for smartphones. Blackberry could leverage its scale to totally dominate the messaging space in certain key markets, such as in West Africa and Indonesia. Secondly, BBMs are sent through Blackberry's own proprietary global data network, which encrypts incoming and outgoing messages and is thus considered "safer" than messages sent through other data networks. Blackberry has confirmed to Fortune that BBMs sent through the iOS and Android apps will travel through its servers and thus will have the same security perks as BBM messages sent between Blackberry users.
It is unclear what the future holds for Blackberry, but the company clearly feels that the potential benefits gained from allowing BBM to grow outside its own platform make up for any potential loss in handset sales. That's a good bet because while Blackberry's flagship phone, the Z10, has received praise from some tech geeks, it is hardly the game-changing product the company needed if it wanted to become a major player in the consumer handset market again. But even if Blackberry folds up its front-facing consumer division, it will remain a player behind the scenes as companies and governments remain dependent on Blackberry servers to keep their data safe. So by letting BBM go, Blackberry's new management may be saving it from a sad and quiet death.
Google's mobile operating system may be getting a boost from -- of all places -- Blackberry.
FORTUNE -- This week's Google I/O conference in San Francisco was disappointingly light on Android news. And it was especially light on new, enterprise-friendly features for Android devices. Instead, it showed improvements aimed at consumers and education institutions. But while Google may not seem focused on making its mobile operating system more attractive to IT departments, MOREMichal Lev-Ram, writer - May 17, 2013 9:23 AM ET
Google's Android and Apple's iOS still make up the vast majority of the market.
FORTUNE -- There's a new number three.
Microsoft's (MSFT) Windows Phone operating system has overtaken BlackBerry (BBRY) for the first time, according to researcher IDC. The firm released its quarterly report on the smartphone market, showing that during the first quarter of 2013, Windows devices made up 3.2% of all smartphones shipped. BlackBerry devices accounted for 2.9% of MOREMatt Vella, senior editor - May 16, 2013 10:46 AM ET
In the U.S., it's everybody's but Apple's according to comScore.
FORTUNE -- It's often been said that Android's share of the U.S. smartphone market has come chiefly out of the hides of Research in Motion's (BBRY) BlackBerry and Microsoft's (MSFT) Windows Phone, but nothing shows this quite as clearly as Horace Dediu's charts at Asymco.com.
Not that Apple (AAPL) hasn't been hurt by the success of Google's (GOOG) mobile platform. Some of MOREPhilip Elmer-DeWitt - May 5, 2013 6:56 PM ET
Overall, quarterly downloads were up 11% and revenues up 9%.
FORTUNE -- Canalys on Monday issued a report on app downloads at four major mobile stores: Google (GOOG) Play, Apple's (AAPL) App Store, Microsoft (MSFT) Windows Phone Store and Research in Motion's (BBRY) BlackBerry World.
The news was good for Google and Apple. For Microsoft and BlackBerry, not so much.
Among the findings:
App downloads at the four stores totaled 13.4 billion in Q1, up 11% MOREPhilip Elmer-DeWitt - Apr 8, 2013 11:30 AM ET
Have a fancy navigation system? It's probably running software built by QNX, a little-known but powerful Canadian company.
By Kurt Wagner, reporter
FORTUNE -- Under the bright lights of the Consumer Electronics Show in Las Vegas last January, a stunning black Bentley sat with the top down on the showroom floor. The Bentley -- a Continental GTC convertible starting at $191,000 -- became the center of attention throughout most of the MOREApr 5, 2013 7:12 AM ET
Also: Yahoo's $30 million acquisition; BlackBerry's mysterious million-smartphone partner.
HTC's marketing chief takes bolder approach [THE WALL STREET JOURNAL]
"We have a lot of innovations but we haven't been loud enough," said Mr. Ho, a Singaporean who is HTC's third marketing chief in less than two years. The new approach, he says, will be bolder.
Customers were treated to a sneak peek of the new strategy when HTC fielded teams to demo the One outside the MOREJP Mangalindan, Writer - Mar 26, 2013 3:00 AM ET
Also: Apple's internal design teams play nice; Samsung guns for low-end smartphone market.
Google's Android unit reportedly building a smart watch [THE VERGE]
According to a recent report from The Financial Times, Google might also be getting into the smartwatch game. And unlike Glass, which was developed in the company's experimental X Lab, the watch (not pictured above) is said to be under development by the Android unit, possibly indicating that Google sees it MOREJP Mangalindan, Writer - Mar 22, 2013 3:26 PM ET
It's increasingly a two-platform race -- at least for now
Click to enlarge.
FORTUNE -- ComScore released dozens of useful slides in its Mobile Future in Focus "webinar" Wednesday. The one above shows that not once since the iPhone was introduced in 2007 has Apple's (AAPL) platform had the largest share of the U.S. smartphone market.Philip Elmer-DeWitt - Mar 20, 2013 5:57 PM ET
As Apple and Google dominate the American market, former leaders Microsoft and RIM find themselves brawling for third.
FORTUNE -- On Jan. 30, Research in Motion -- the Canadian company that once owned the American smartphone industry -- will attempt to regain its foothold with the launch of a new mobile operating system, BlackBerry 10. The company's goal is not to out-innovate the iPhone. Rather, in a market controlled by Apple MOREJessi Hempel, writer - Jan 28, 2013 5:00 AM ET
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