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RIM’s BlackBerry 10, LTE PlayBook Pending, But Will Anyone Care?

The pressure is clearly mounting for Research In Motion to wow the world with its BlackBerry 10 platform.

The 28-year-old company is expected to release a BB 10 superphone later this year, potentially coinciding with the release of novel slick devices by its rivals including another iPhone and smartphones based on Microsoft’s new Windows Phone 8 operating system.  

Waterloo, Ontario-based RIM is thought to be running short on time in its battle to reinvigorate interest in BlackBerry, although analysts maintain the company still has a chance to improve its position in the highly competitive U.S. market where its share has been dissipating at an alarming rate.  

Given its plummeting market valuation, critics may overlook the positive developments at RIM where it remains a leading wireless platform in many countries and grew its customer base to 77 million users at the end of its fiscal year ending March 3, 2012.

Still, the maker of BlackBerry phones and PlayBook tablet computers must “almost go in a new direction because the legacy base is eroding and you have to be able to … change things to make people stand up and notice,” said IDC analyst Will Stofega, who manages the firm’s Mobile Device Technology and Trends research program.  

At BlackBerry World earlier this month in Orlando, Fla., RIM gave application developers and other attendees a sneak peak at BB 10. Stofega was particularly impressed with a camera feature.

“Finally, they are not talking about specs and carrier certifications,” he said.

Founded: 1984
Headquarters: Waterloo, Ontario, Canada
Customer base: 77 million users
BlackBerry Messenger users: 55 million
Stock exchanges: NASDAQ Global Select Market (RIMM) and Toronto Stock Exchange (RIM)
Annual sales: $18.4 billion
Annual net income: $1.2 billion or $2.22 per share
Global Scale: relationships with 650 carriers and distribution partners in roughly 175 countries
Employees: 16,500 as of March 3, 2012
CEO: Thorsten Heins

But RIM hasn’t released even to its developers a phone with all the bells and whistles that BB 10 will incorporate.

Another analyst who attended BlackBerry World said RIM is being rather furtive about BB 10, merely providing a glimpse of what the new operating system will include. A new user interface and virtual keyboard are among the features that the company showcased through a video, said Avi Greengart of Current Analysis.

“RIM clearly is not ready to sell product yet,” said Greengart, research director for Consumer Devices at Current Analysis, “so they are not telling people all the details yet.”

RIM may be taking its time for good reason. The company jumped the gun on an early release of its BlackBerry PlayBook tablet computer in the face of pressures, Stofega said. The initial PlayBook was criticized for having too few features and sales have been disappointing.

Thorsten Heins, RIM’s recently appointed CEO, has underscored “he’s not going to release anything … that is not ready for market,” Stofega said.

RIM, though, doesn’t have much time for its new products to hit the market because its competitors are already thought to be working on next-generation devices.

“They have to get everything done this year especially around BB 10,” Stofega said.

Even when RIM releases BB 10, there’s no guarantee it will be a smashing success.

The burden will fall on the company to convince users to “buy this new operating system from us instead of these mature operating systems with massive install base of apps and content that we don’t have,” said Greengart, referring to Apple’s iPhone and phones that run on Android.

The analyst is wondering whether RIM will manage to unveil innovations that appeal to certain niches of the smartphone market.

“They don’t have to come out with something that’s better than the iPhone in every way because if that was the goal they are guaranteed to fail,” Greengart said. “But they do have to convince some consumers that their product is better tailored to those consumers’ needs.”

RIM is clearly making a huge bet on BB 10, which it hopes will help lead the embattled company into a bright future. Said the company in its  annual report: “RIM expects the next generation BlackBerry 10 OS will power future BlackBerry smartphones, tablets and embedded solutions such as those found in advanced automotive electronics, including entertainment, communications and navigation applications.”

Meanwhile, RIM is expected to eventually release a PlayBook that features 4G LTE connectivity. Such a capability could be useful to businesses like truck drivers who need to do inventory management, Greengart said. Still, analysts say the overall market for connected tablet computers hasn’t been a huge success.

“Will this [LTE-enabled PlayBook] generate sales amongst consumers? Not, not in significant volumes,” Greengart said.


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