RIM's BlackBerry 10 delays a 'major setback'

Summary:By delaying launch of its next-generation smartphones, Canadian phonemaker will find it tougher to come back strongly in smartphone market, analysts warn.

Research In Motion's (RIM) announcement that it would delay the launch of its BlackBerry 10 devices to 2013 had led to analysts saying the impact may be "devastating and a "major setback" for the Canadian company struggling to reclaim market share.

On Thursday, the smartphone maker announced that while its software teams have made "major progress in the development of key features" for its next generation operating system, the integration of these features and the associated large volume of code into the platform has proven to be "more time consuming than anticipated". It added that the BlackBerry 10 platform and smartphones remain its No. 1 priority.

As such, the launch date for BlackBerry 10-based devices has now been pushed back to the first quarter of 2013, the company said.

CEO Thorstein Heins, who took the reins last Janurary, noted that in terms of interest, the OS has gained "encouraging" and "positive" traction among app developers, content partners and carrier partners.

Analysts' sentiments for the company's future, however, were grim. Anshul Gupta, principal research analyst at Gartner, for one, told ZDNet Asia that the delay is a real "setback" for RIM as from now till its devices launch, there could be at least three big launches from Apple, Google, and Microsoft.

"With this delay, and missing on the holiday season [later this year], it will make it harder for RIM to come back strongly in the smartphone market," Gupta stated.

Apple is expected to unveil its next-generation iPhone later this year, while Google just unveiled its Nexus 7 tablet running the latest Android 4.1 "Jelly Bean" OS during its I/O developer conference. Earlier this month, Microsoft revealed its first two Windows 8 tablets and the latest iteration of its Windows Phone mobile OS.

Nicole Peng, research director for China at analyst firm Canalys, said the device delay is "devastating for RIM [and] terrible news from the market's point of view". Whatever remaining confidence operators and partners have in RIM is "diminishing even faster", she added, noting how companies such as Palm have shown that product delays can "cost a whole business".

Besides Google and Apple, Peng said the mobile market now has "other options", with South Korean giant Samsung working hard on enterprise-grade devices and Nokia making inroads into the enterprise market helped by Microsoft.

CapioIT founder Phil Hassey said it "might just be too late" for RIM. Apart from the news being a "major disappointment", it is difficult for the delayed product to meet customer expectations given "negative sentiment" to BlackBerry in most markets, he noted.

Analysts did acknowledge that RIM's decision to delay BlackBerry 10's launch was not without logic. Hassey said the phonemaker is in a "Catch-22" situation. "Clearly, if you are not ready, you do not release [the product]. But they need something to really capture attention of the market."

Gupta concurred. "It seems RIM has learnt from its own experiences in the past. Rushing into product launches when they aren't ready hasn't resulted in success," he pointed out.

Revenue, job losses
Besides announcing the delay of its next-generation smartphones, the Canadian company said it expected the next several quarters to "continue to be very challenging for its business" due to an increasingly competitive environment, lower handset volumes, and pressure to reduce its monthly infrastructure access fees, among other reasons. This would likely see it post an operating loss in second quarter of fiscal year 2013, it stated. 

RIM saw its revenues for the first quarter ended Jun. 2, 2012, plunge 33 percent to US$2.8 billion from US$4.2 billion in the previous quarter.

RIM also revealed that as part of its restructuring program--dubbed "Core" (cost optimization and resource efficiency)--to save up to US$1 billion by end-2013, around 5,000 employees from its global workforce will be cut.

Topics: Software, BlackBerry, Hardware, IT Employment, Mobile OS, Mobility

About

Jamie Yap covers the compelling and sometimes convoluted cross-section of IT and homo sapiens, which really refers to technology careers, startups, Internet, social media, mobile tech, and privacy stickles. She has interviewed suit-wearing C-level executives from major corporations as well as jeans-wearing entrepreneurs of startups. Prior... Full Bio

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