Can BBM Build Back BlackBerry's Brand?

BlackBerry is using its messaging app to build back its brand, but it may not be enough to turn around the company.

Feb 24, 2014 at 1:30PM

BlackBerry (NASDAQ:BBRY) is down but not quite out. Somehow the company has managed to limp along in the mobile world, even after its big bet on the BB10 operating system and the Z10 smartphone failed to garner significant consumer attention. The company is in full survival mode and is desperately trying to build back a brand that was once recognized as the mobile leader.

BlackBerry is looking to its messenger app, BBM, to turnaround its tarnished brand image -- but it may be too late.


Source: BlackBerry

The best bet
There's no doubt BlackBerry Messenger is the company's best bet brand rebound. The company's line of smartphones and its improved mobile-operating system haven't done the job, so the company needs to look elsewhere for consumer attention.

Messaging apps are an extremely popular form of communication, and BBM boasts about 80 million monthly active users, with nearly half of those on iOS and Android platforms.

BlackBerry also just announced it will launch its messaging app on the Windows Phone platform this coming summer. Though Windows Phone is still a small segment of the mobile-platform space, any additional growth for BBM would obviously be welcomed by BlackBerry.

On top of that, BlackBerry recently update BBM to include voice over Internet protocol (VoIP) calls for iOS and Android users, as well as new Dropbox features.

But even with the Windows Phone expansion and new features, BBM still might not have enough steam to build back BlacBerry's brand.

Timing isn't everything
BlackBerry's messaging services have been around since the early days of mobile, and yet users have moved on from BlackBerry for both devices and messaging services. If a great messaging app were all that BlackBerry needed to survive then it wouldn't have fallen as far as it has.

Yes, there are highly valued companies that just make messaging apps -- Facebook's (NASDAQ:FB) purchase of WhatsApp proved that. But comparing WhatsApp, or any other popular messaging app, to BBM isn't a fair assessment. And valuing BBM using the same standards that Facebook used with WhatsApp is an even wore assessment. WhatsApp has 450 million active monthly users, with 70% of those being active on a daily basis, and gains an additional 1 million users everyday. BlackBerry's numbers obviously aren't even close, so valuing BBM's users at the same price as WhatsApp's users simply isn't a fair comparison.

Foolish final thoughts
BlackBerry needs something to build back its brand, and BBM is certainly helping to do that. But looking at the long-term play, I still don't see how BBM turns anything around for the company.

Some have estimated BBM will hit 150 million users by the end of this year. Even if that happens, BlackBerry would still need to find a way to monetize the service. Messaging apps Viber and WhatsApp were acquired before they generated revenue, but BBM still has a relatively small user base and would need something to show potential buyers that it can make money.

While it's always possibly BBM could grow and become a potential acquisition, with so many international messaging services already in the space I think competition is only going to intensify. This means that BBM will have to increase users quickly or figure out a way to make money from it, or both. Though CEO John Chen seems committed to BBM, the company can't focus all of its attention completely on its messaging app. Which leaves the opportunity wide open for companies that can.

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