Research In Motion renamed itself BlackBerry and unveiled the new BlackBerry 10 lineup at an event in New York this morning, aiming to lure back customers that have defected to Apple Inc. and Samsung Electronics Co.
The company introduced a touch-screen model called the Z10 and a version with a physical qwerty keyboard named Q10, both of which run the revamped BB10 software.
The Z10 starts at $149 in BlackBerry’s home country of Canada, where it goes on sale Feb. 5.
The phone won’t appear in the U.S. until March, with the Q10 following globally in April, the company said.
The event marks a do-or-die moment for the company, which maintains and research and development operation in the Research Triangle ares. It has seen its market share fall to a quarter of what it was three years ago. It’s counting on the BlackBerry 10 to reverse that slide and help return the Waterloo, Ontario-based company to profitability. The stock dropped as much as 9.1 percent after today’s presentation, signaling that investors remain skeptical.
“I don’t think it’s going to be dramatically better,” said Roger Entner, an analyst with Recon Analytics in Dedham, Massachusetts. “At least not good enough to get people to switch from Apple iOS or Android.”
Chief Executive Officer Thorsten Heins and Chief Marketing Officer Frank Boulben have been crisscrossing the globe to show carriers and corporate customers the BlackBerry 10’s features, aiming to distinguish the product from Apple’s iPhone 5 or devices that run on Google Inc.’s Android platform.
Shares Drop
Heins has spent the past year overhauling the company, cutting 30 percent of its workforce in a bid to save $1 billion and reorganizing the sales and marketing teams. The stock more than doubled since late September, reflecting growing investor support for the CEO’s strategy and optimism that BlackBerry 10 phones can catch on with consumers.
Still, the shares have pared those gains every day this week, including today’s slide. The stock fell 7.8 percent to $14.44 at 12:26 p.m. in New York as investors wait to see how the product does.
“This thing has to have legs,” said Gus Papageorgiou, an analyst at Scotia Capital in Toronto.
The touch version of the phone relies on a virtual keyboard that learns where you usually hit the keys, improving typing accuracy over time. Its software also lets users check their e- mail, calendars and other features without leaving the application they’re running — relying on a “hub” interface.
“Whatever you do, you’re always one swipe away from the heart of your activities,” Heins said at today’s event.
‘Angry Birds’
BlackBerry also announced support for the new platform from makers of applications, including the “Angry Birds” game, Microsoft Corp.’s Skype and Amazon.com Inc.’s Kindle.
Heins brought R&B singer Alicia Keys on stage during the presentation, saying the company had hired her as its global creative director, a new position.
In an exchange with Heins, Keys said she had re-embraced the BlackBerry as a customer after trying other smartphones.
“I kind of broke up with you for something that had a little more bling,” she said. “Now we’re exclusively dating again and I’m very happy.”
Other U.S. customers, though, will have to wait longer to get their own BlackBerry 10 phone. A March release in RIM’s most important market means it won’t be available for more than a month. The Z10 will available first in the U.K., where it goes on sale tomorrow. In the United Arab Emirates, which Heins said was a key market for BlackBerry, it will be available Feb. 10.
BlackBerry Name
The company’s name change, meanwhile, has been approved by the board and BlackBerry will begin trading under the ticker BBRY on the Nasdaq Stock Market and BB in Toronto, Boulben said in an interview. The change is designed to put the company’s iconic product at the heart of its corporate branding, he said.
The company’s challenge now is to ensure that sales don’t slow once the first wave of BlackBerry faithful have upgraded their smartphones. It also needs to win over skeptics who have abandoned the BlackBerry brand altogether. The BlackBerry 10 was delayed multiple times, giving the one-time smartphone pioneer a reputation as a technology laggard and costing it market share.
The company was poised to finish 2012 with 4.7 percent of the global market, compared with almost 90 percent for Apple’s iOS and Android combined, IDC said last month. BlackBerry had an installed base of 79 million subscribers at the end of last quarter, down from 80 million users three months earlier.
“We need to see the subscriber base stay where it is and grow a little bit for this thing to be considered a success,” Scotia Capital’s Papageorgiou said.
Sales Estimates
Papageorgiou upgraded his rating on the stock to the equivalent of a buy earlier this month, saying analysts’ consensus for BlackBerry 10 sales may be too low. He expects BlackBerry to ship 51.6 million devices in fiscal 2014, which begins in March. That includes 29.8 million BlackBerry 10 models. By comparison, Apple sold 47.8 million iPhones last quarter alone.
In its most recent quarter, BlackBerry shipped 6.9 million smartphones, a mix of aging BlackBerry 6 and 7 models. Those earlier versions have a more basic Web browser and lack the large glass display that helped fuel the iPhone’s popularity.
The company has about $2.9 billion in cash, giving it enough money to market the new phones aggressively. It will run a commercial during Sunday’s Super Bowl game, where advertisers are paying as much as $4 million for a 30-second spot.
Even so, turning Apple or Android users into BlackBerry converts will be “very tough,” said Ehud Gelblum, an analyst at Morgan Stanley in New York.
“Certainly there’s pent-up demand within the current BlackBerry base,” he said. “But to assume they can go beyond that base and begin to convert net new Android or iOS subscribers? That’s asking for a lot.”
