BlackBerry (BBRY), nearing five months into its planned resurgence, recently took a few days to celebrate its progress, pump up developers and make some significant product announcements. The big news at the BlackBerry Live conference involved two key announcements, plus a rumor that overshadowed everything else.
Here’s what went down May 14-16 in Orlando:
A new, low-cost smartphone for emerging markets: In a surprise reveal, CEO Thorsten Heins showed off a third new BB10 smartphone, the Q5. Featuring a physical QWERTY keyboard, like the Q10’s, the Q5 is described as a “youthful and fun BlackBerry for select markets.” Translated, this means a cheaper BlackBerry 10 phone, similar in form factor to the Q10 but less powerful and featuring a lot more plastic. It’s also available in several more colors, adding pink and red to the standard black and white. The Q5 might never see North American shelves, with BlackBerry looking to target emerging markets like South America, Africa and Asia where the platform has a bigger presence than in North America and still has millions of potential customers looking for their first smartphones (a much easier sell than trying to convince someone to give up their iPhone or Android smartphone).
BBM to go cross-platform: One of the crown jewels in BlackBerry’s platform has always been BlackBerry Messenger, better known as BBM. The secure mobile messaging system has long been a BlackBerry selling point and an exclusive. However, with fewer and fewer BlackBerry owners to chat with, that exclusivity has lost some of its luster. Heins announced that BBM clients have been developed for iOS and Android (no mention of Windows Phone at this point) and will be rolled out as apps this summer. By letting iPhone and Android smartphone users chat with BlackBerry users over BBM, BlackBerry both solves the issue of limited instant messaging participants and gives competing platforms a taste of the BlackBerry experience. Smart.
A steady stream of upbeat news: BlackBerry World, the platform’s app store, has grown to 120,000 apps, and that selection finally includes Microsoft’s (MSFT) Skype — apparently Microsoft wasn’t slighted by BlackBerry’s snub of Windows Phone 8 in its BBM cross-platform release plans. BB10.1, an update to the new BB10 operating system, is now available. Heins also confirmed U.S. carriers would begin selling the Q10 QWERTY keyboard smartphone in June — something BlackBerry fans have been waiting for since the device was first unveiled back in January.
The biggest rumor floating around the Orlando conference was the existence of a BlackBerry “phablet” — one of those “too big to be a smartphone, too small to be a tablet” devices that Samsung (SSNLF) popularized with its Galaxy Note line. According to the Financial Post, two unnamed analysts confirmed that BlackBerry has such a device in a near-finished state and claimed they had signed nondisclosure agreements regarding the device.
If this is true, I’m going to point back to a piece I wrote a few weeks ago commenting on BlackBerry CEO Thorsten Heins’ infamous “tablets will be dead in five years” quote. One of my theories was that Heins was using semantics to explain away tablets as we know them. If BlackBerry is indeed prepping a phablet, it sounds like he might be going that route. (“This big device in my hand? Nah, it’s not a tablet. Tablets are dead. This is a phablet.”)
Further supporting this theory was a comment Heins made during a Q&A panel at BlackBerry Live. Quoted by CNET, Heins said: “We believe in a single element of mobile computing: one on your hip,” following that up with: “The industry got stuck on the term tablets.”
Sounds like a forthcoming phablet to me, but stay tuned. BlackBerry simply can’t afford to abandon the tablet market to its competitors (especially in enterprise), but it needs to distance itself from the PlayBook disaster by taking a different approach to tablets. The mud-slinging at the category during the past few weeks seems like an obvious attempt at delay or distraction, and it seems clear the company is prepping something larger than a smartphone for release.
The Bottom Line
How did the investment world react to the announcements at BlackBerry Live? The company’s stock shed 7.4% of its value during the event. It has continued to creep down slightly since then, so it seems pretty clear investors are not quite so pumped about the company’s progress as Thorsten Heins is.
I think the company still has potential. I’d like to see how the Q10 does once it’s released in the U.S. (I suspect it will do much better than the Z10 touchscreen smartphone), and I think going after emerging markets with the cheaper Q5 is a smart move.
I’m really curious to see what happens in the tablet space, though. BlackBerry can’t continue to pretend it doesn’t exist, but another PlayBook fiasco at this point could kill the company.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.