BlackBerry 10 offers choice, but demand likely niche

Analysts and consumers have positive impressions of BlackBerry's latest handsets, but say eliciting interest beyond existing users will be a "struggle" and the Canadian phone maker will be a niche player.
Written by Kevin Kwang, Contributor

The launch of the new BlackBerry 10 operating system (OS) and two devices--the Z10 and Q10--has elicited mostly positive feedback from industry watchers and consumers.

However, while offering a somewhat differentiated user experience, BlackBerry's new products announced Thursday are not compelling enough for consumers to make the switch from existing platforms and will likely leave it as a niche player in the smartphone market.

Adam Leach, principal analyst at Ovum, said the BlackBerry 10 platform offers a differentiated user experience in today's crowded and homogenous smartphone market, and the Z10 and Q10 will "stand out" from the Android handsets and look distinct from Apple's iPhone.

"The user experience of BlackBerry 10 introduces some nice new features but importantly builds on BlackBerry's user interface [UI] heritage and therefore will certainly appeal to existing BlackBerry users," Leach said.

This sentiment was shared by Malik Saadi, principal analyst at Informa Telecoms & Media, who said the new Z10 device in particular delivers "some of the most efficient, accurate, and engaging ways" to access messaging and social-networking services to date.

"The BlackBerry Z10's comprehensive and yet intuitive typing experience, the architecture of the messaging hub, the speed of execution, and multitasking capabilities make it stand out from the best smartphones currently available on the market. Its LTE performance has also been first rate, at least in North America," Saadi said.

He added that the superior messaging experience and its highly integrated enterprise features mean the new BlackBerry device could well win back the hearts of business users, particularly in Europe and North America.

The extra screen real estate makes for easier Web browsing and reading. (Credit: BlackBerry)

Consumers unmoved

Despite the positive reactions following the launch, Singapore consumers ZDNet spoke to say the revamped BlackBerry OS and devices are not enough to entice them to switch from their existing smartphones.

Zen Ho, a mobile developer, said: "The Z10 looks good, OS is OK, but overall nothing to compel me to try it out over other alternative OSes."

William Foo, who owns an iPhone as well as a company-issued BlackBerry smartphone, added it is a combination of factors that make BlackBerry devices less compelling. "It's not my primary phone, the screen is too small for any use, and there aren't many interesting apps."

Foo added that if he has to change his handset now, it would be "one of the Korean brands or HTC" as he "just doesn't see himself using the BlackBerry as a primary device."

Bob Kwek, a Singapore-based research and development engineer, did point out that the Q10, which comes with a physical keyboard, is "not bad." "If there is no camera included, the Q10 would be a very tempting choice for me as a work phone," he said, noting his industry requires employees to have camera-less handsets to protect corporate intellectual property.

The BlackBerry Balance feature, which allows users to toggle between personal and corporate apps on one device is "good stuff" too, Kwek added.

Saadi said the Balance feature, together with the rebranded BlackBerry World store, which offers 70,000 apps, music, and video, will enable the BlackBerry devices to make a good start in developed markets and could potentially challenge devices such as Samsung's Galaxy S3 and Apple's iPhone.

He said the bigger challenge for BlackBerry is winning over consumers. "Given that consumers are generally slow to adapt to new user experiences, they might find it hard to connect with Z10's user interface from the first touch."

Getting retailers' support is another important component to bolster sales, the analyst noted. Sales representatives often prefer to sell as many phones as possible without having to put in too much effort in educating consumers, and this might slow initial sales volume, he said.

The high price point for BlackBerry's Z10 device may also alienate consumers from the emerging markets, he said. BlackBerry users in these markets tend to opt for affordable devices with an average selling price of around US$200 and, given the high-end specifications of the Z10, it is highly unlikely the typical BlackBerry user will be able to afford the new smartphone, he said.

Indonesia, which has long been seen as a BlackBerry stronghold, was omitted from the six initial launch markets, presumably because of the high price point. The six cities are New York, US; Toronto, Canada; London, UK; Paris, France; Dubai, UAE; and Johannesburg, South Africa.

First-quarter sales target: 1 million units

Saadi added BlackBerry should aim to sell at least 1 million units of the Z10 device in the first quarter from the launch date, as anything below this figure "would call into question the company's ability to execute its marketing strategy."

Conversely, anything above 3 million units would be a "spectacular" performance, which would resurrect both the consumers' and investors' confidence in the BlackBerry brand, he added.

Leach also said the challenge for BlackBerry will be to attract new users and those who have already moved to alternative smartphone platforms.

"Ovum believes that despite a well-designed BlackBerry 10 platform, which will certainly attract short-term interest from existing users, the company will struggle to appeal to a wider audience and in the long term, will become a niche player in the smartphone market," he stated.

Leach's colleague and fellow analyst, Jan Dawson, had earlier said that while the new smartphones will give the company some reprieve, BlackBerry 10 will not be the Canadian phone maker's salvation. This is because it still faces the twin demons of consumer-buying power and a chronic inability to appeal to consumers from mature markets, he said.

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