Can BlackBerry Convert the Masses?

In boardrooms, political meetings, and corporate break rooms across the world a small, but loyal, group of users still pull BlackBerry (NASDAQ: BBRY  ) devices from their pockets and tap out messages to each other. But for the rest of the world, consumers have moved on to Google's Android, Apple's iOS, and even Microsoft's Windows Phone OS, and they aren't looking back.

This means BlackBerry needs to do more than just sell smartphones, it needs to make new converts.


Source: BlackBerry.

Go forth and multiply
BlackBerry's loyal base recently showed its face when T-Mobile ran a promotion offering smartphone credit to BlackBerry users if they upgraded to a new iPhone. BlackBerry loyalists took to Twitter and called out T-Mobile CEO John Legre on the promotion. After throwing a few punches against BlackBerry himself, T-Mobile offered a few promotions for BlackBerry devices.

But despite their loyalty, BlackBerry users are vastly in the minority. To try to grow this base, BlackBerry just announced two new mid-range devices, the Z3 and the Q20. The Q20 has physical buttons for calling and navigation, as well as a trackpad. It's a throwback to some of BlackBerry's popular devices, but with the new BB10 operating system. BlackBerry CEO John Chen recently told CNET that some of the email and cut-and-paste functionality of the Q20 is reminiscent of old-school BlackBerry as well.

Part of this back-to-basics approach comes from BlackBerry loyalists questioning the merits of BB10 OS.

Disenchanted disciples
BlackBerry's problem in keeping existing users and wooing new ones lies in the company's BB10 operating system. If you're looking for proof, consider that this past quarter BlackBerry sold just 1.1 million BB10 devices.

BlackBerry's failed savior, the Z10. Source: BlackBerry.

That's a terrible number to begin with, but it's especially bad when investors consider that BB10 was supposed to help turn BlackBerry around. The poor response to the OS can easily be compared to Microsoft's Windows 8 launch.

In an attempt to meld a touchscreen interface with a PC OS, Microsoft created one of the most difficult operating systems to date. Its negative impact on the PC market has been huge. Shipments of PCs significantly declined in the same quarter Windows 8 launched, leading IDC to say that, "at this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market." 

To help lure back users, Microsoft brought back a version of its famous Start button, and has made other navigation changes to the OS, with more on the way. That seems strangely familiar with BlackBerry's new Q20 device that seems to be an attempt to give old-school BlackBerry users something familiar to identify with. But with a cold reception to BB10 already in full swing, it seems highly unlikely a few buttons on a new device will entice former users back to the company, or attract new ones.

Foolish thoughts
To bring new users into the fold, Chen thinks the company will need to educate people on why BlackBerry is the best operating system for them, and make it easy for customers to use it right out of the box. He's also mentioned that a new flagship device will launch later this year.

But we've unfortunately heard this story before. The Z10 was supposed to bring BlackBerry back into the mobile game, but it has clearly failed to do so. This time around, BlackBerry seems to be taking a different approach, with Chen telling Bloomberg Television that the company's future devices will "predominantly" have keyboards over touchscreens.

It appears that BlackBerry is stuck between struggling to gain new customers without alienating its existing user base. Trying to please both groups isn't a winning strategy. I don't see how a new flagship device, whose defining feature is a keyboard, is going to bring new users to BlackBerry. At the same time, BB10 has had more than enough time to show what it has to offer, and consumers are unenthused. Sure there's a still loyal following of BlackBerry users right now, but they're failing to make many converts. 

Editor's Note: The original article referenced the Z30 as a new phone. That was incorrect, it was the Z3. The Motley Fool apologizes for the error.

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Read/Post Comments (7) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 01, 2014, at 2:56 PM, 6Father wrote:

    I'm looking forward to the new releas

  • Report this Comment On March 01, 2014, at 2:58 PM, 6Father wrote:

    I looking forward to the new phones. I've had Android and 3 iphones, none match the Blackberry for what I need, a good functional phone and email machine.

  • Report this Comment On March 01, 2014, at 6:22 PM, GEng12 wrote:

    In this article, they mention the Z30 as being one of the newly released phones... this is actually the Z3. The Z30 has been on sale since the end of October, 2013 which is an incredible phone.

  • Report this Comment On March 01, 2014, at 7:46 PM, TMFNewsie wrote:

    GEng12,

    You're right, I meant to say Z3 and not Z30. I'll have that corrected as soon as possible. Thanks.

  • Report this Comment On March 02, 2014, at 10:26 AM, vincentliew wrote:

    I think the author of this article need to test a blackberry phone for a week before you post this article, testing a blackberry will definitely fine tune your writing about mobile phone topic.

  • Report this Comment On March 02, 2014, at 10:50 AM, vincentliew wrote:

    Check out the BBRY turn around story http://video.cnbc.com/gallery/?video=3000250004. Bullish both fundamental and technical!

  • Report this Comment On March 03, 2014, at 12:21 AM, leasehound wrote:

    I have used a Verizon Z10 for the last nine months, having switched over from an iPhone 4S, and it is simply the best phone I have ever used. Unfortunately, the carriers here in Texas have little interest in, or knowledge of, the product. If BBRY could provide an incentive to the carriers to get more of the BB10 phones into the hands their customers, I suspect the majority would agree. and from everything I hear and read, the Z30 is even better.

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