BlackBerry was placed on death watch in the middle of 2012. Rapidly slowing sales was the reason. In the last quarter of 2012, BlackBerry sold just over 7.3 million handsets, representing 3.5% of the smartphones sold in that quarter. This was a steep fall from better days when RIM would ship almost one in every five smartphones built (Source: Gartner).
BlackBerry’s survival hinged on the release of the new Blackberry 10 operating system. With some very difficult decisions made by BlackBerry CEO Torsten Heins, BlackBerry pulled through long enough to release BlackBerry 10 and three handsets, the Z10, Q10 and Q5, giving it a viable platform to continue. But even the most optimistic executive at BlackBerry knew that would not be enough. The Apple-Google smartphone duopoly is just too strong to beat. The app gap pretty much guarantees that it will take three or four years at least before any other mobile operating system could pose a serious challenge to these two giants.
In April 2013, Gartner predicted that sales of BlackBerry devices will drop for the next by three million units a year, from 34 million units sold in 2012, down to a 24 million by 2017. In June 2013 Canalys released its own projections, predicting that BlackBerry will maintain pretty much 4.8% market share in 2012, and projects a 4.6% market share by 2012. While BlackBerry’s market share will remain stable over the forecast period, in real terms, its shipments are expected to more than double. At the same time, Canalys predicted that the market share of Windows Phone will continue to grow driven mainly by support from Huawei, Lenovo, and ZTE. Canalys predict that the market share for Windows Phone would grow from 2.4% in 2012, to 12.7% by 2017. This is projected to be just behind Apple at 14.1%.
I think BlackBerry management is well aware of the looming scenarios. It is in this context that BlackBerry announced in May 2013, that it would be releasing BlackBerry Messenger (BBM) for Android and iOS. Many a BlackBerry user questioned why the company would release one of BlackBerry’s killer apps to competing platforms. This is a play at trying to secure BlackBerry as the third ecosystem and knock Windows Phone out of the game.
BlackBerry 10’s success will not come from taking sales from Apple or Android, but from taking sales away from Windows Phone. The Apple-Google duopoly will not fade overnight. BlackBerry’s best bet is to position itself so that in three or four years, it could make a serious effort at challenging these giants. Achieving this means taking Windows Phone out of the equation. And BBM could just be the tool to do this.
Disenchanted iOS users are most likely to jump ship to Android. Disenchanted Android users are most likely to give iOS a spin. For the most part, it will really only be those who are disenchanted with both iOS and Android who will take a look at BlackBerry 10 or Windows Phone. BlackBerry needs to make sure those deciding to leave Android and iOS, enter BlackBerry’s fold, and not head over to Windows Phone.
Should BlackBerry succeed in making BBM the pre-eminent messaging platform by seeding BBM to the two leaders, BlackBerry would make itself the only viable third platform. By keeping BBM from Windows Phone, it would deny the platform of an essential app needed to succeed. This strategy really comes out of Microsoft’s own playbook. Its success depends on making BBM for Android and iOS a success.
BBM is not the only weapon in BlackBerry’s arsenal. It has now launched Secure Work Space for Android and iOS. So it looks like BlackBerry is planning a friendly coexistence with Android and iOS, to the exclusion of Windows Phone.