With so much riding on its new operating systems and phone line, BlackBerry (NYSE:BB) won't get much wiggle room from investors, nor should it expect any. We all knew when BlackBerry CEO Thorsten Heins announced the arrival of its BB10 OS in late January, along with a couple of highly anticipated new phones, that the rollout needed to go smoothly. Monday's news that a major customer is swapping its employees' BlackBerry smartphones for iPhones wasn't what Heins had in mind.
The bad news
In the past year alone, BlackBerry's market share has declined at an alarming rate -- and it's not alone. Even Apple's (NASDAQ:AAPL) iOS experienced a drop in market share in Q4, slipping from 23.6%, to 20.9%, compared to 2011's fourth quarter. The primary beneficiary of BlackBerry's and Apple's decline in the OS market? Google (NASDAQ:GOOGL) and its Android OS.
Nearly twice the number of android OS smartphones were sold in 2012's Q4 compared to the prior year, raising Google's piece of the global OS pie to nearly 70%. Microsoft (NASDAQ:MSFT) and its new Windows 8 OS is also benefiting from BlackBerry's and Apple's decline in market share. Microsoft's OS now runs 3% of the world's smartphones as of the last quarter, up from a paltry 1.8% in 2011.
As recently as Q4 of 2011 , BlackBerry owned nearly 9% of the global smartphone market, as measured by operating systems. By the fourth quarter of 2012, BlackBerry's piece of the pie shrunk to just 3.5%, and Heins and team are relying on its new BB10 to turn things around. Getting BlackBerry back into the smartphone mix is a big challenge in and of itself, so you can bet investors will react negatively to any bad news, as they did on Monday.
The reason for BlackBerry's 5% drop in stock price earlier this week was the announcement that one of its customers, Home Depot, has opted to furnish 10,000 of its executives and corporate folk with Apple's iPhone, in lieu of BlackBerry devices.
Losing a deal for 10,000 phones won't end BlackBerry's comeback bid; it sold nearly 7 million smartphones last quarter, and expectations are running high for its Z10 and (eventually) Q10 units this year. As for Apple, it sold about 47.8 million iPhones in its most recent quarter, so another 10,000 isn't exactly corporate celebration material. But remember, Heins is walking a fine line here, and perception will continue to become reality for BlackBerry investors, at least for the foreseeable future.
Home Depot's shift to iPhones also reinforces the fear that more companies are blurring the lines between business and personal mobile computing. BlackBerry has long been the choice of commercial and government customers, but Home Depot's decision makes it pretty clear that the business world once owned by BlackBerry is becoming wide open.
Early release of Z10? Sort of...
As discussed in an article a week ago, Heins grudgingly admitted that the release of BlackBerry's Q10 smartphone model -- the one with the keyboard -- would be delayed until late May or early June for U.S. customers, to give mobile carriers time to test the devices. BlackBerry's Z10 smartphone, which has started off well in Canada and the U.K. according to Heins, should be released domestically in mid-March. Like most, I expected the Z10 to go on sale in the U.S. shortly after BlackBerry's Jan. 30 BB10 party, but it wasn't to be. Why the delays?
In the U.S., wireless companies pick up the majority of the cost, by way of subsidies, so you can bet they want to make certain the devices are going to work. But what if a carrier offered the new BlackBerry Z10 smartphone domestically, without a subsidy?
Turns out, if you're willing and able to shell out $999, you can get your Z10 in a couple of business days, beginning now. A relatively new carrier in the wireless game, Solavei , will sell you a BlackBerry Z10 without a long-term contract through GSM Nation.
After announcing delays of its Q10, and watching Home Depot opt for iPhones, BlackBerry shareholders could use a little good news. A recent upgrade from Wells Fargo will help, as will making BlackBerry's Z10 available early in the U.S., even without a subsidy. A non-subsidized Z10 won't sell millions of units, but BlackBerry can use all the good news it can muster.
We haven't seen the last of big stock price movements with BlackBerry, not by a long shot. Every bit of news -- good, bad, or indifferent -- will elicit wild swings in valuation. That's what happens when you put it all on the line, as BlackBerry's done with BB10. In the long run, I still like BlackBerry's chances; but if the recent news has taught us anything, it's that you better get ready for a wild ride.