LOS ANGELES — Not so long ago, consumers couldn’t get enough of their CrackBerrys. Now it appears many are sobering up.
In
a tech landscape crowded with new gadgets and features, the BlackBerry,
once the undisputed leader of the smartphone industry, is rapidly
losing ground to Apple Inc.’s iPhone and devices that run Google Inc.’s
Android software.
Just two years ago, BlackBerry
accounted for 43 percent of the U.S. smartphone market. These days, that
figure has dropped to about 19 percent, according to market research
firm ComScore Inc.
Even longtime users acknowledge there’s something decidedly uncool about owning a BlackBerry.
“I’m
like that old lady driving an Oldsmobile in a parking lot when everyone
else is driving BMWs,” said Jesica Ryzenberg, 32, a BlackBerry owner in
San Francisco.
Recent turmoil hasn’t helped
matters, including numerous product and software delays. Several top
executives at BlackBerry maker Research in Motion Ltd. have departed.
More recently, the phone that built its reputation on security and
reliability was struck by a three-day service outage that affected users
on five continents.
And now in the ultimate sign of its troubles, the company has been pegged as a takeover candidate.
Earlier
this month, RIM’s stock, down almost 70 percent from the beginning of
the year, fell below its book value for the first time in nine years, a
sign investors consider the Canadian smartphone maker to be worth less
than the net value of its property, patents and other assets, according
to Bloomberg News data.
“Clearly the market has
moved on,” said Chris Jones, principal analyst at research firm Canalys.
“From applications to multimedia to the quality of the cameras to the
quality of the browsing experience, it’s lacking in all of those areas,
plus more.”
But even as BlackBerry’s share of the
cellphone market continues to shrink, analysts say, the brand is not
quite this generation’s PalmPilot — yet.
In the
mid-1990s, the hand-held PalmPilot personal digital assistant helped
spark the mobile digital revolution but rapidly became outdated as more
smartphones entered the market. Last year Hewlett-Packard Co. announced
that it was buying Palm Inc. for $1.2 billion.
With
BlackBerry, “I wouldn’t count them out entirely, but it’s definitely
going to be an uphill battle,” said Shaw Wu, an analyst at Sterne Agee.
RIM
executives are brushing off signs of trouble. They say BlackBerry
continues to have a loyal customer base of 70 million subscribers, many
of them professionals and young tech users, and point to a marketplace
that has yet to be fully tapped: In the U.S., only 37 percent of
cellphone users have a smartphone, said Rick Costanzo, regional managing
director of RIM’s Americas division.
“We are in
the very early, early stages of a huge global transition, and we have
everything to play for. This game is far from over,” he said. “Our
challenge is to educate the marketplace.”
Sales
and reviews for BlackBerry devices running the company’s new OS 7
operating system, with browser speeds that are outperforming rivals,
have been strong, executives say. Co-Chief Executive Jim Balsillie said
in a September conference call with analysts that the BlackBerry 7
launches were going “extremely well” and that the company felt
well-positioned for the holiday season.
RIM is
rolling out several new features and devices in the coming months,
including a software upgrade to its PlayBook tablet in February that
will enable the device to run Android apps. Next year, the company is
planning to release its BBX operating system, which will also be
compatible with Android apps, to phones and tablets.
Analysts
say that although BlackBerry’s image has slipped in the U.S., the brand
still has a strong foothold in regions including Southeast Asia, Latin
America, Britain and India, where growth has been robust and BlackBerrys
are seen as a status symbol.
Loyal BlackBerry
users such as Tyson Lee, 34, say that although the phones aren’t trendy
anymore, they still get the job done. Lee prefers the BlackBerry’s
physical keyboard over the iPhone’s touch screen.
“I can see past the hype,” he said.
“I’m
not the usual BlackBerry user where it was thrust on me by work; I
actually sought it out,” said Lee, a mechanical engineer from Downey,
Calif. “I’m comfortable with it. Yeah, it’s slow. I’ve seen faster
browsers on the iPhone and Android, but I really can pop out an email
faster than any of my friends.”
But the smartphone
market is about much more than wireless email these days, and
BlackBerry has lagged behind when it comes to innovation, Sterne Agee’s
Wu said. Even one of BlackBerry’s strongest customer bases —
corporations hooked by the device’s solid security capabilities — has
been weakened by the so-called consumerization of IT that developed
during the economic downturn.
To
cut back on costs, many businesses stopped providing employees with
BlackBerrys but allowed them to bring in their own smartphones, which
were then configured for work use. With so much buzz surrounding newer
brands, many workers opted to buy iPhones and other devices.
As RIM tries to win back or draw new customers in the U.S., many former BlackBerry aficionados say it may be too late.
After
eight years and six BlackBerry models, Ourfa Coco Zinali, 23, said
she’d had enough of her phone’s frequent shutdowns and frozen screen,
poor battery life, lack of apps and slow browser speed. After nearly all
of her friends ditched their BlackBerrys for other devices, there were
fewer people to connect with through the BlackBerry Messenger instant
messaging application, rendering one of the phone’s most popular
features useless.
Her latest BlackBerry, a Bold
9700, broke down so often that Zinali said she replaced it nine times
before giving up. The Van Nuys, Calif., resident recently went to an
Apple store to buy a white iPhone 4S.
“I took it
home and I couldn’t take my hands off of it. There’s so much to do on
there, and it’s so fast. Already, I would never, ever go back to
BlackBerry,” she said.
“It was like a relationship: Yeah, I loved you and we had a good time, but I’ve moved on.”
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