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I Was Wrong About BlackBerry

By Evan Niu, CFA - Apr 4, 2013 at 9:00PM

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This Fool made a bold prediction about BlackBerry's BBM Music service way back in 2011. It turns out I was dead wrong.

Way back in August 2011, I made a bold prediction after Research In Motion -- aka BlackBerry (BB 1.02%) -- took a shot at social music. The smartphone maker had announced a new BBM Music service in an attempt to leverage the large user base of its popular BBM messaging service.

The gist was this: For a $5-per-month subscription, users could pick up to 50 songs of their own, and also listen to songs picked by friends and contacts. The more people you knew, the more songs you had access to. It was a rather strange value proposition, which is why I predicted: "One year from today, BBM Music will be gone, dismissed as a failed experiment, while Research In Motion's market share drops into single-digit territory."

I was wrong about BBM Music.

BlackBerry has just now notified current subscribers that it is killing the service effective June 2. This month will be the last time customers are billed, and the service will slowly wind down over the next two months. BlackBerry points to Rdio as an alternative music service to consider. It took more than one year for BlackBerry to throw in the towel on this, and the service will have run for nearly two years by the time it's shuttered.

BBM Music simply had no chance against incumbent music services. While Apple (AAPL 4.01%) dominates digital music sales, even the Mac maker's social overtures with Ping fell flat. For what it's worth, BBM Music lasted nearly as long as Ping did. Apple buried Ping shortly after its second birthday.

Eventually, Apple realized it was best to leave the social stuff to a social network, which is why it partnered with Facebook (FB 1.39%) for most of its social needs. Facebook's partnership with Spotify is probably the most compelling social music service, since both services start at the attractive price point of free. For exactly $0, users get access to Spotify's massive library that's quite a bit more than 50 songs, and can easily check out what friends are listening to.

As far as my market share prediction goes, that actually came to fruition almost immediately. BlackBerry's global market share would slip into single-digit territory in Q4 2011, when it grabbed 8.2% of smartphone shipments, according to IDC's estimates.

You win some, you lose some.

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