Some advice for BlackBerry CEO: Keep taking the tablets!

May 1, 2013

Mr. Heins has an agenda here and he's promoting it as hard and as often as he can. His company is in trouble and its attempt to elbow its way into the tablet market was an unmitigated disaster.

The CEO seems to think that we all have collective amnesia, but some of us clearly remember the dear, dead, distant days of 2010 and 2011 when RIM was eulogising endlessly about the importance of tablets in the mobile sector.

To much fanfare the company then introduced the PlayBook tablet. It was too little (it came without email, for God's sake), too late and it flopped - badly. Massive stocks of the device gathered dust on shop shelves and in warehouses and even when RIM cut the price to the bone consumers still shunned the thing. Finally, at the back end of 2011, RIM bowed to the inevitable and booked a US$485 million loss on the PlayBook.

Thereafter the tune changed. In press conferences and analyst briefings held in the early summer of 2012 RIM executives avowed that they remained "completely committed" to tablets. However, by early this year, the Heins regime trimmed its sails and came out with a new line: that future commitment to a tablet device would be contingent upon the relative success of BlackBerry's new mobile telephony platform.

Now Mr. Heins would have us believe that the Z10 and Q10 are, or will be, so successful, that they will be instrumental in bringing about the demise of an entire burgeoning global tablet device market. If rumours about the low take-up of the Z10 have any substance this is hubris sufficient to invite a devastating response from the gods of telecoms and the Internet. And it is said that those whom the gods wish to destroy they first make mad.

It looks like yet another example of sour grapes. The fact is that RIM huffily turned its back on a market it couldn't crack and is now suggesting that sector on which it spent so much time and effort to get a toehold wasn't worth the candle because its days were numbered anyway - which begs the question, "If that's the case, and you knew it, why did RIM squander all those resources on the PlayBook in the first place?"

Here is the reality. Apple's iPad is a phenomenal, runaway, worldwide success. Sales of the device are up by 66 per cent year-on-year. It sold close to 20 million iPads in the last reporting quarter alone. Samsung is nipping at Apple's heels with its Galaxy range of tablet hybrids but Blackberry is a distant also-ran and a one-trick pony hanging all its hopes on a revamped mobile phone with a keypad. And the best of Canadian luck with that.

Mr. Heins bestowed upon humanity the benefit of his foresight via the medium ofthe Milken Institute conference in Los Angeles. Here are some of the gems he strewed around himself for the rest of us to pick up.

He said, "By 2018 I don't think there'll be a reason to have a tablet anymore. Maybe a big screen in your workspace, but not a tablet as such. Tablets themselves are not a good business model." Whoa! Hold your horses there for a dang-blasted minute. Two years ago RIM told us that tablets are a good business model... ah, yes, but that was then and this is now, for now.

Mr. Heins continued, "In five years, I see Blackberry to be the absolute leader in mobile computing, that's what we're aiming for. I want to gain as much market share as I can, but not by being a copycat." Really? What tosh.

The CEO reckons that the BlackBerry Q10 (the one with the physical keyboard) will sell in the "tens of millions". It seems he is basing this optimistic forecast on the fact that the Q10 apparently "quickly sold out" in "the Selfridges stores chain in the UK". Unfortunately, Mr. Heins didn't have immediately to hand the actual figures of the number of devices sold.

So, let's put things in perspective. Selfridges has four shops; the flagship store on London's Oxford Street, one in Birmingham and (for some reason) two in Manchester. That's it. And there were no news reports in the UK about punters fighting to get in to any of them to get their hands on a Q10.

But, let's be generous and assume that somewhere between 2,000 and 10,000 of the devices were sold on April 26 when the Q10 was released in the UK. The questions are: 1) Why didn't BlackBerry launch in the much bigger and more vital US market first? And 2) How can Thorsten Heins extrapolate the alleged results achieved in four UK shops to potential global sales tens of millions - especially as the Q10 doesn't go on sale in the US until the end of May and when it does it will come at quite a premium?

It will be available through Verizon, AT&T etc and will be priced at a minimum of US$249 plus tariff plan on a minimum two-year contract. By comparison an iPhone 5 costs $199. Now, maybe some of the dwindling band of BlackBerry aficionados will prepared to stump up that kind of money (and let's remember that many BlackBerries are supplied to corporate customers who then allocate them for free to certain staff) but a lot won't.

Interestingly, the research house CCS Insight has, this very morning, published its 2013 Tablet Market Forecast for the next five years. How's that for timely? Marina Koytcheva, director of forecasting at CCS Insight comments, "Since June last year, we've seen faster tablet adoption than we had expected in some emerging markets such as China, as the prices fell rapidly. We now expect 181 million tablets to be sold worldwide in 2013, and have uplifted our forecast until 2017."

The forecast for 2017 (at the end of the five year period that could haunt Thorsten Heins forever) is that the global tablet market will reach 419 million units and be worth $95 billion in 2017. Overall well over a billion tablets will be in use worldwide by the beginning of 2018.

Someone's got to be wrong here. And my bet is on Mr. Heins. Indeed I reckon that by 2018 we'll be able to add his name to the illustrious roll of visionaries led by Thomas J. Watson of IBM who told us "I think there is a world market for maybe five computers", and Ken Olsen of DEC who would have had us believe, "There is no reason for any individual to have a computer in his home." Doh!

Thank you and goodnight.

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