BlackBerry held onto the number three position in worldwide smartphone sales to end users in Q1 2013, according to a report by Gartner Research issued on May 14. At 6.22 million units, BlackBerry just edged out Microsoft at 5.99 million. BlackBerry has proven a tough competitor to Microsoft, which has mounted a full court press to gain the number three position.
Still shedding users
At the BlackBerry Live conference in Orlando on May 14, CEO Thorsten Heins let fall that there were 60 million subscribers to BlackBerry Messenger, which probably indicates that BlackBerry is still shedding users. As of March 28, BlackBerry stated in their fiscal year earnings report that their subscriber base was about 76 million. Still, I estimate this is about double the total number of users of Windows Phone (7-8), so BlackBerry has an ecosystem to build on.
BlackBerry is not gaining market share however, posting a sequential decline from the 7.33 million units sold in Q4 as well as a substantial year over year decline from 9.94 units in Q1 2012. BlackBerry's market share not stands at just 3.0%, down from 6.8% in Q1 2012.
Microsoft is accomodating BlackBerry by also losing market share sequentially, at 2.9% versus 3.0% in Q4. Given Microsoft's claims of "momentum" for Windows Phone 8, as well as Nokia's reported sales of 5.6 million Lumia phones in Q1, I was expecting stronger sales of Windows Phones, about 8 million total. Combining the Gartner and Nokia data, this means that Microsoft's other manufacturing partners, HTC, Samsung and Huawei only sold 390,000 phones between them.
BlackBerry is set to start selling the more traditional QWERTY BlackBerry Q10 in June in the U.S. This is mainly intended to appeal to traditional BlackBerry users and get them converted to the new BB 10 OS. In fact, the Q10 will ship with the a revised BB 10.1, which is also being deployed in the U.S. to Z10 users this month.
At BlackBerry Live, Heins also unveiled the low-cost Q5 phone, which is similar to the Q10 in layout. The Q5 is intended for emerging markets and probably intended to blunt the success of low-end Lumia phones. After the phone was unveiled, BlackBerry's share price took a dive of about 4%, indicating that investors weren't impressed.
This is understandable, since even Nokia's lowest price Lumia phones are full-touch, so that the keyboard of the Q5 seems an anachronism. Once again, I think the Q5 targets existing BB users. BlackBerry is used in 175 countries.
BlackBerry is attempting to leverage its still significant presence in the enterprise by introducing BlackBerry Enterprise Service (BBES) 10.1. BBES doesn't try to fight the bring-your-own-device trend but instead work with it by giving IT managers a common platform to manage BB 10, iOS, and Android devices.
A key element of this strategy is the provision of a common messaging platform for all devices. BlackBerry Messenger (BBM) will be made available for iOS 6 (and higher) and Android 4.0 (and higher) as free apps. Since BBM operates through BlackBerry's servers, BlackBerry is essentially serving as the guarantor of the security and privacy of communications via BBM regardless of device. Initially, BBM on non-BB devices will be a very basic text messaging app, but by the end of the year BlackBerry promises full parity with the BB 10.1 version, including video chat, and a Twitter-like service of BBM called Channels.
BlackBerry Balance, which keeps personal data, communications, and apps segregated from business use continues to be appealing to IT managers. BlackBerry claims that BB10.1 is the most secure mobile platform in the world. While this is debatable, BlackBerry is probably the most trusted by corporate and government users, just on the basis of extensive prior experience. According to Heins, the U.S. Department of Defense is committed to BlackBerry as a critical component of their communications infrastructure.
Through the acquisition of QNX Software Systems in April 2010, BlackBerry not only gained the operating system that would eventually become BB10, BlackBerry also gained entre to the automotive infotainment market. The QNX operating system was already in use in over 200 different makes of automobiles for GPS navigation and infotainment.
At the Live event, BlackBerry took the opportunity to show off some fairly advanced in-car touch screen capabilities, running BB10. Video chat using a large tablet-like center console touch screen was demoed, somewhat reminiscent of the touch screen in the Tesla Model S. BlackBerry's presence in automotive provides a somewhat reassuring backfill to their smart phone business, but I got the impression that the demo hadn't really been very well thought out. Okay, so you can video chat from your car. To be really compelling, there needs to be integration with the rest of the BlackBerry ecosystem of services, so that the BlackBerry user transitions seamlessly once inside the vehicle. BlackBerry in the car still seems a work in progress.