Blackberry Reboots. This Time It's Different; the Question Is Whether That Is Enough

With monumental effort and great fanfare, Blackberry, the company formerly known as RIM, launched itself all the way into...2011.

The good news and the bad news appears to be that the reception is mixed. The technology puts the company in contention with Apple and Android, which means the company may no longer be irrelevant. The problem is that it did so a full two years later than they did. And since when is competing directly with Apple, Samsung and Google considered a sure strategic path to survival, let alone global dominance?

While the new design and the operating system that makes it work got reviews ranging from very positive to indifferent (but few negative ones), the real challenge is whether this is sufficient to lure users away from the platforms they are already using and to which they are accustomed. From a marketing and product development standpoint, what Blackberry may have done is halt the drain of existing users, enabling it to create a stable if smaller base of enthusiasts comfortable with a brand and product they know and whose use gives them confidence.

Whether the company can win new adherents from the ranks of first time users or those disillusioned with its competitors is another question.

Interestingly, however, it is a real question. Blackberry chose to launch its own operating system rather than simply ally itself with the Android clan. That took some courage - foolishly, perhaps - but the result addresses an issue that has been hanging in the mobile tech firmament ever since Apple won its patent victory over Samsung. That issue is whether anyone can create something new that will be sufficiently different and scalable to create a viable alternative in mobile.

The answer appears to be a qualified yes should Blackberry sales begin to rebuild. The implication, should the new product gain acceptance, is that there is room for more than two platforms. This contributes to Apple's competitive woes and clears the way for further innovation, perhaps even sparking an uptick in financing for same. The fact is that legacy brands like Nokia, Motorola (now Google) and Blackberry are not going quietly.

Blackberry's stock price has been rising since last fall. It was down 12% yesterday as the markets absorbed the news about the new products and pondered their impact. This was a bet-the-company move by Blackberry management and the wisdom of that bet is yet to become clear. JL

Paul Taylor and Daniel Thomas report in the Financial Times:

With the launch of two smartphones running its new operating system, BlackBerry has in effect hit the reboot button on a desktop PC that had crashed. The company, formerly known as RIM, has even renamed itself after its eponymous devices.

But this is just the start of its turnround efforts, as BlackBerry’s chief executive Thorsten Heins acknowledged at the launch He is obviously confident that the BlackBerry 10 operating system has what it takes to ensure the company remains a relevant player in the smartphone market, but most analysts believe it will be a tough, even gargantuan, task.

BlackBerry’s board decided three years ago to build a new operating system based on the recently acquired QNX rather than adopting Google’s Android. The company believed it needed its own operating system so its products would stand out from the competition.

Since then, its internal developers have been working to turn QNX into a viable multitasking smartphone operating system, capable of supporting the wide range of features that smartphone users demand, including full touchscreen capabilities. BB10 is the result of that process.

Based on early assessments, analysts say BB10 represents an important leap forward for BlackBerry. But it is still playing catch-up with rivals, including Apple with its iOS and Samsung, whose Galaxy handsets use Google Android.

“Despite a well-designed BlackBerry 10 platform that will certainly attract short-term interest from existing users, the company will struggle to appeal to a wider audience and in the long term will become a niche player in the smartphone market,” says Adam Leach, an analyst at Ovum.

At its core, BB10 is designed to bring together the work and play functions of a mobile device. The fast internet browser and intuitive multimedia features in a sleek casing will be familiar to any smartphone user, but there are also new features that RIM hopes will win back customers lost during a period when the company’s innovation fell short.

The Z10 and Q10 launched on Wednesday are just the opening gambit, with further high- and mid-priced devices expected to launch later this year. And BB10 is designed to be a platform for mobile computing as much as mobile communications, opening up the possibility of the software powering a host of other so-called vertical devices, from tablets to internet-connected cars.

“RIM has been on a transformation journey from mobile communications to mobile computing,” said Mr Heins.

Kristian Tear, chief operating officer at BlackBerry, says it is not only the smartphones that have been reinvented – so, too has the company itself. “This is just the beginning. It can power many types of hardware and verticals. This is a device designed for work and play,” he says.

Analysts have said that one of the biggest challenges for RIM will be launching with enough applications to compete with rivals. BB10 will initially have 70,000 applications, including 1,000 top apps, and this is expected to grow to 100,000 in a month. The new apps include popular must-haves, such as Skype and business-orientated offerings from companies such as SAP and Cisco.

Pete Cunningham, analyst at Canalys, says this will set a new benchmark for operating systems, given a lack of innovation on the rival Apple and Google platforms. “This is the biggest innovation we have seen for some time. It is a very powerful platform, regardless of whether or not RIM has a long-term future.”