Yahoo Finance Could BBM save BlackBerry?
If hell is indeed going to freeze over at BlackBerry’s headquarters, it’ll probably take a few more days for the temperature to drop.
The company’s plans to release BlackBerry Messenger for Android and iOS devices hit a snag Saturday when a pre-release copy of the Android version was leaked. Within eight hours, approximately 1.1 million users downloaded and began using the software. BlackBerry’s servers sagged under the load, and in a blog post, the company confirmed it was putting its Android and iOS rollouts on hold and disabling the unreleased Android app while it figures out a new schedule for a staggered, country-by-country rollout. Service for BBM on BlackBerry devices was unaffected.
A case of unfortunate timing
The launch-related hiccup couldn’t have come at a worse possible time for BlackBerry, which Friday announced another wave of upcoming layoffs – 4,500 employees across all areas of the company – as it warned of a near US$1 billion loss in the most recent quarter. The company’s $1.6 billion in sales significantly missed Wall Street estimates of $3.06 billion as inventories of BlackBerry 10-based devices like the Z10 and Q10 piled up. As BlackBerry continues a strategic review process that’s expected to result in the sale or closure of underperforming parts of the company, it also announced it would be cutting corporate expenditures in half by 2015.
BlackBerry needs BBM to take flight, as it is seen as a key indicator of BlackBerry’s radically different future, one built on software and services instead of on handsets. Over 60 million BBM users send and receive an estimated 10 billion messages per day, and the new cross-platform versions of the popular instant messaging app represent the first major test of BlackBerry’s ability to engage – and keep – an audience based largely on the strength of its code instead of its hardware.
The software has been available only on BlackBerry devices since its initial release, and the company had resisted calls to make it available on competing mobile platforms from Apple, Google, and Microsoft. When BlackBerry dominated the smartphone market, this strategy made sense as the company was simply protecting its proprietary technology. At the time, porting BBM to iOS and Android might have been the thin edge of the wedge that removed a key reason – namely, exclusivity – for consumers and enterprises to stick with BlackBerry handsets.
A different world
But as BlackBerry’s grip on the smartphone market loosened, the value of the BBM sub-brand was threatened by the shrinking global base of BlackBerry users – now down to an estimated 70 million from a peak of 80 million last year. After BlackBerry’s announcement that it would be reducing its handset portfolio from six to four devices and retrenching from the consumer market amid crippling competition from Apple and Google to focus on its enterprise customers, the writing was on the wall for its handset division. It’s only a matter of time before the company gets out of the smartphone-making business altogether.
Which leaves BBM with no choice but to go multiplatform as quickly as possible. While each major mobile player has its own IM solution – Apple iMessage, Google Plus, WhatsApp, Kik, and IM+, among them – no one offering has emerged as dominant, and significant technical barriers remain in place that limit interoperability. A clear gap has opened up for a robust, enterprise-friendly, trusted offering to stake its claim to the new global IM standard, and as it loosens its hardware shackles, BlackBerry feels BBM is ready for prime time.
Amid the dark clouds gathering over BlackBerry, BBM could be the bright light that points the company toward a code-based future.
Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. carmilevy@yahoo.ca
