BlackBerry Is Not Having a Great Month
Everything is going wrong for the Canadian mobile company lately
BlackBerry has fallen on hard times. Ever since Apple launched the iPhone in 2007, the keyboard-dependent device and its parent company, Research in Motion, have been bleeding market share and profits have been falling along with it. But this month has packed a punch. Not only did BlackBerry come out a loser in the Google-Motorola deal, but new not-so-positive details have emerged about the role of Blackberrys in last week's deadly riots across the United Kingdom. On top of all that, the launch of the company's latest smartphone has been met with anything but enthusiastic reviews from critics. BlackBerry has already cut 2,000 jobs this summer.
Life in "No Man's Land"
Google's $12.5 billion acquisition of Motorola Mobility is one of the biggest tech stories of the season. Almost immediately after the announcement, whispers of a Microsoft-Nokia deal that could rival the new software-hardware duo echoed across the blogosphere. Hewlett-Packard's purchase of Palm last year and Apple's increasingly dominant position in the mobile market this year have left BlackBerry standing in the shadows of giants. "They are in no man’s land at this point," wireless analyst Chetan Sharma told Reuters.
It's lonely in no man's land. Following the Google-Motorola deal, BlackBerry managed to gain an encouraging 10 percent amid speculation that Research in Motion might also be acquired, but the stock started to sink again as analysts started weighing on the likelihood of that actually happening. Overall, the company's stock is down 53 percent from this time last year. One reason is that BlackBerry is looking increasingly outgunned in the furious and on-going patent war. Despite having joined the consortium of companies that bought Nortel's patent portfolio, BlackBerry's own portfolio of 2,033 patents is comparatively small compared to Motorola's 17,000, and according to one analyst not "likely to cover the most cutting-edge technology."
The PR Nightmare in London
Patents aside, BlackBerry also recently found itself in an awkward position after the London riots. Widespread reports that teenagers initiated the violence using the BlackBerry Messenger (BBM) service. The company's harried response so far seems like it's backfired big time.
Leading up to the riots, BlackBerry had been pretty successful in marketing their phones to the young people. Largely because the BBM service is free, British youths from poorer parts of the cities favored the devices over iPhones and Androids. However, this happened to be the same demographic that took up arms when the unrest in Tottenham started festering, and the network's famously strong security prevented police from tapping into the network in order to track down the organizers. Research in Motion was quick to cooperate with the police investigation, but this only resulted in an angry attack from the hacker group Anonymous. Since then, BlackBerry servers have been raided by British intelligence agencies and the BBM service--along with Facebook and Twitter--faces the possibility of strict regulation by the British government. That said, some people think that all of the free advertising offered by the bad news might not be a totally terrible thing.
And a Handful of Mixed Reviews to Boot
As if it were a light at the end of the tunnel, BlackBerry had an end of summer product launch slated for this week. The new set of phones included upgrades to its Torch and Bold lines, upgrades that BlackBerry was very excited about. But when the company sent out the specs at the beginning of the month, not many people seemed excited in return. "The late arrival punctuates what has been a jarring collapse this year of the formerly beloved BlackBerry maker," said Scott Morowitz at The Street. "RIM missed a crucial turn in the smartphone market and management has been seen as ineffective in its response."
Reviewers finally got their hands on the new phones this week. While the sentiment was mostly positive when it came to the phones themselves, folks still seemed pessimistic about the company's outlook in the long run. Ginny Mies at PC World called the new Torch model "solid, responsive and slightly underwhelming" while Vincent Nguyen at Slashgear said that it was "not the device to break the company out of its existing user-base. Of the company's much higher end model, Tim Stevens at Engadget remarked that even despite the "sophisticated aesthetic of the new Bold's new design it is not "a phone that'll end what ails RIM and introduce it into new markets."
What's next, an employee mutiny? Oh yeah, that happened last month…