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BlackBerry Hopes Services Will Be Its Savior

Sarah Thomas
6/28/2013

Coming off of a disappointing first quarter, BlackBerry is trying to downplay its poor device sales and position itself as an end-to-end platform provider for both the consumer and enterprise markets.

But Wall Street isn't buying the act. BlackBerry stock was down 24 percent after announcing its earnings before the market on Friday.

It would appear customers aren't buying it either. The company formerly known as RIM wouldn't reveal how many BlackBerry 10 devices it sold to end customers in Q1, only noting that they made up 40 percent of the 6.8 million total devices it shipped to carriers. That means BlackBerry shipped only 2.7 million BB10 devices to carriers in their first full quarter on the market. (See Heins Cries Foul Over BlackBerry Stomping.)

It's no secret that BlackBerry's success is hanging on the success of BlackBerry 10, its complete overhaul to the smartphone experience. So far, it's off to a weak start, but CEO Thorston Heins reiterated on the earnings call that BlackBerry just began its transition and only started selling the BlackBerry 10 operating system on the Z10 five months ago. "Too early to say" was a phrase he repeated several times. (See BlackBerry's Second Bite.)

At the same time, Heins was intent on convincing analysts that there's more to BlackBerry than the new OS. While he said the company isn't considering splitting out its services business from its devices, it is clearly banking on the former for growth.

To prove that BlackBerry was a services company, despite adopting the name of its hardware as its company name, Heins discussed the strength of BlackBerry Messenger (BBM) in the consumer market. He noted that the company will continue to add new services to BBM, like its BlackBerry Channels, a social network that already has 60,000 active users on the beta. These services will also make their way to Android and iOS devices by the end of the summer.

Heins also talked up BlackBerry's strength in the enterprise, it's one-time stronghold. It's in the process of rolling out BlackBerry Enterprise Server (BES) to enterprises, as well as extending a scaled-down version to iOS and Android.

"We are bringing a good level of security to iOS and Android to give peace of mind to CIOs, but absolutely the full management experience and security experience on Blackberry is unmatched," Heins said. "Customers look at us to provide an end-to-end solution still, and we can't break that paradigm."

One device that won't see any new BlackBerry services is the PlayBook, its erstwhile attempt at a tablet. Heins said he was not satisfied with the level of performance or user experience and will, therefore, not bring the latest OS to the tablet.

When asked about what's been perceived as weak carrier support of its devices, Heins noted that "the carriers are with us," adding that their promotional help goes beyond what you see in TV commercials and will continue for future devices and campaigns.

— Sarah Reedy, Senior Editor, Light Reading

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JVerity
JVerity
7/1/2013 | 12:58:21 AM
re: BlackBerry Hopes Services Will Be Its Savior
Whoever solves the BYOD problem may have a big leg up in the enterprise market. I could see Blackberry doing that; I think it already has a dual-personalit phone, no?
Sarah Thomas
Sarah Thomas
6/28/2013 | 3:36:55 PM
re: BlackBerry Hopes Services Will Be Its Savior
The Q1 only launched in the US a week ago on Verizon, so it hasn't had a chance to factor into BlackBerry 10 sales. And, it's the qwerty version that may draw in some BB faithfuls. I can't see it being enough to reverse BB's fortunes, but it may give it a little sales bump.
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