While the market’s initial reaction to the company’s recent earnings suggest investors have confidence in CEO John Chen, no one doubts the company’s troubles are far from over. (This includes BlackBerry co-founder Mike Lazaridis, who sold more than $27 million worth of his shares this week). While startups tend to “pivot” from one product or business model on a regular basis, these kinds of transitions are much more difficult for a company with the size and reputation of Blackberry. The scrutiny will be much bigger, as will the competition. It includes:
A world where smartphone sales begin to slide
A year ago, it seemed like BlackBerry’s biggest problem was keeping up with Apple’s iPhone and Samsung’s Galaxy devices, but now everyone is starting to see signs of stagnation. While BlackBerry’s losses were probably among the worst, even one-time contenders like HTC suffered through sluggish demand from consumers. At this point, BlackBerry would have to come up with a smartphone that not only matched its rivals but redefined the market entirely.
The rise of the uber-mobile management firms
As the bring-your-own-device (BYOD) trend became one of the most talked-about issues in corporate IT, a slew of companies came in to challenge BlackBerry Enterprise Server (BES), which traditional managed devices for office use. While BES has a good track record, and I suspect Chen will focus much of his strategy in this area, BlackBerry may struggle to stand out. I also predict considerable consolidation in this area, where firms like MobileIron, AirPush, Good Technology and others will either merge or be acquired by the likes of IBM, SAP and Cisco.
Messaging apps that mess with BBM
While BlackBerry’s one high note of 2013 was the rapid uptake of its newly cross-platform messaging service, BBM is by no means a front-runner in this space. The biggest acquisition that didn’t happen in tech this year may have been WhatsApp, which was reportedly courted by both Google and Facebook at one point. Last week, WhatsApp reported it had surpassed 400 million active users, compared with 80 million BBM users worldwide. Even if BlackBerry’s attempts to add a social media dimension with BBM Channels starts to take off, it’s most likely WhatApp could offer something similar or allow itself to become part of an existing social media giant.
Right now BlackBerry’s biggest asset may be Chen’s quiet confidence. “This isn't the first time I've held the reins at a tech company facing challenging circumstances,” he wrote in a recent op-ed. “I'm here to tackle this challenge because I believe we can succeed.”
That optimism -- which doesn’t sound much different than what Thorsten Heins voiced when he took over -- will be challenged before too long. As Chen is no doubt aware, companies like BlackBerry compete not only with other smartphone and mobile device management vendors but with the opinions of skeptical analysts and shareholders. Keeping them at bay will keep BlackBerry more than busy over the next twelve months.