On Monday of this week, an industry analyst from research firm Gartner posted a blog entry talking about the launch of the BlackBerry 10 platform in the US, and what it means.
I’ve seen several headlines talking about this, yet very few link to the real source, so if you want to read it straight form the horse’s mouth, go here. Note that this isn’t a formal research piece, but more of an informal post from the analyst covering the sector to his clients. So what is Gartner saying?
They believe “market conditions will make it extremely difficult for BlackBerry to rise above iOS, Android and Windows Phone 8 platforms.” Obviously I think it makes sense to say BlackBerry 10 isn’t going to rocket past iOS or Android. But I think Microsoft is in a very tough situation here. Apple and Google are growing their relevance in a world where Microsoft is under intense pressure. BlackBerry is still in a very competitive race for holding onto the #3 platform position, and at this point I think they’ll win that battle.
Anyway, what else does Gartner say? They predict BlackBerry will achieve less than 5 percent worldwide smartphone market share through 2016. They don’t say how much less than 5%, which is important because as per Gartner’s own estimates for Q4 2012, BlackBerry had 3.5% share of the smartphone market. So an increase to 5% wouldn’t be a gigantic win, but it would mean they think BlackBerry market share is going to rise, not fall.
I’ll also point out that Gartner estimated the smartphone market grew 47% in 2012. It’s going to keep growing. If the market keeps growing and Gartner is actually forecasting BlackBerry to grow faster than the market, that’s not a bad thing! After all, BlackBerry doesn’t need to be the market leader. They just need to rebuild a sustainable business that produces profits.
The analyst who wrote the Gartner blog post is clearly coming at things from more of an enterprise angle. Here’s an important part of the post:
The question is whether the new platform is sufficient to motivate the buyer to choose BlackBerry over the platforms they know. It comes down to how effective BlackBerry's marketing will be, and how much money they can spend to excite the user in favor of a BB10 device. That challenge will be daunting, but at least BlackBerry has made a reasonable attempt with a competitive platform, and it will get its chance to prove to both end users and developers that it has an attractive platform. Gartner recommends that enterprises trial BB10 products and familiarize themselves with the offering whether or not they intend to deploy or support.”
My take on this: The author isn’t taking a terribly negative tone. He’s simply starting from the position of a skeptic and showing how he could be proven wrong with his forecast. I think that’s reasonable. And given the enterprise focus he has, it’s quite possible he isn’t aware of how many Android and iOS users have been buying Z10s since the launch.
I thought it might also be worth pointing out the difference between industry analysts and sell side (equity) analysts. They are not the same. Industry analysts mainly function to understand the industry so they can produce a forecast as to which companies will achieve what sort of market share. Sell side analysts, on the other hand, are also tasked with understanding an industry and following the detailed financials of companies so they can make stock predictions. Sell side guys (like I used to be) will often use industry analyst research market share forecasts as a basis for their financial forecasts.
I tell you that simply to make it clear that industry analysts are not stock analysts and they have nothing to do with trading at all. But just like stock analysts, industry analysts can get it wrong. They do get it wrong. Nobody is perfect.
My guess is that Gartner is at least heading in the right direction by estimating a recapture of market share by BlackBerry. Any headlines that cast the Gartner numbers in a negative light are missing the point here ... under all the noise, we have a major industry research house saying that the trend of BlackBerry market share erosion has officially reversed.