The quality and durability of BBOS and legacy devices are so legendary that they continue to outsell BlackBerry 10 devices still after a year of BB10's launch and, as announced, will stay in BlackBerry's handset business.
Why is this happening and what does this mean for BlackBerry moving forward? Some explanations are obvious, such as the lack of effective marketing by BlackBerry and support from network carriers for BB10 devices. But there are other not so evident factors that are leaving BlackBerry followers puzzled about the decision to continue BBOS and legacy devices. Let's take a closer look.
A business undoubtedly pushes the sales of their most profitable services and/or products. In BlackBerry's case it's BBOS devices and BIS services. The 2013 Q4 earnings report reflects that around 2.3 million BlackBerry 7 devices were sold compared to only 1.1 million BB10 devices. In addition, their service revenue brought in 546 million dollars respectfully, but BIS represents 80% of this. But should we really be surprised at this? No, if you set aside BB10 marketing, carrier relationships and the transition to BES.
I agree it's a lot to set aside, but how can anyone logically expect a fully featured, well established OS with reliable BIS service and arguably the best quality made mobile devices to simply "die out" or transition to BB10 so quickly? You can't. This expectation requires a perception adjustment. BB10 is awesome — and still in its infancy stage — competitively beats out other iconic mobile operating systems in certain regards. If you step back to realize that the current version of BB10 only reflects the beginning of its potential, it enhances the excitement around it. But BlackBerry still has a long road ahead of them. Currently, BB10 is not making significant revenue for the company; BBOS is. Why would we expect any business, let alone a greatly challenged BlackBerry, to abandon any kind of profit? It doesn't make sense — especially if BBOS is still in demand by clients and customers.
I live in New York City and I see countless BBOS devices. It's no surprise that people love them. My mother recently retired from the Department of Education and reluctantly had to hand in her work issued legacy device. That damn phone was still running OS5 but it worked well and she loved it. She actually visited a Verizon store to inquire about purchasing a similar device but was disappointed at the choice between a Z10 and Z30 (Q10 for whatever reason was not on display). Aside from the pro-Android/iPhone sales associates, the BB10 dummy units on display didn't help. Needless to say she walked out with a basic Samsung phone.
I live in New York City and I see countless BBOS devices. It's no surprise that people love them.
If you've been following BlackBerry for a while you're already aware that the 9900/9930 (Bold) devices are still hailed by many as BlackBerry's strongest device to date. This should go to the Z30 but given its limited availability, low sales, and that most people aren't even aware of its existence, almost makes it irrelevant in conversation.
Whenever I get the chance, I engage in friendly conversation with people that have legacy devices, and it seems the common denominator among them is that they find it unnecessary to upgrade or change presently because the devices still work well and are holding up strong. This had me thinking, because I can't recall any mobile device outside of BlackBerry that has made reliable & robust phones that last for years (Nokia perhaps?). It's almost standard nowadays that smartphones have a typical usage life of about 2 years before faltering in one way or another. But whether mobile devices are created that way or network carriers are finding ways to keep customers under contract is another topic altogether.
Are BlackBerry legacy devices and BIS services stunting the growth of BB10 and BES because of how well they've been built? Could this be a case where something good is actually bad? Maybe. But then again, where has a reputation for making strong reliable products and services ever hurt a company? Major transitioning for any business has always been a challenging and costly maneuver. There are companies that have never survived one — not to mention those who were never able to achieve the kind success they once had — Blockbuster, Motorola anyone? BBOS and BIS are keeping BlackBerry financially alive (for now) as development and innovation for the company's new services and products continues to evolve at a rapid pace. CEO John Chen has clearly mapped out the four divisions within the company and their individual roadmaps for the upcoming quarters.
Part of it is the continuation of BBOS sales and BIS services, as it well should be. The decision is a no brainer and should not be judged. Whatever the case BlackBerry is generating money. It shouldn't bother shareholders, fans or followers that there is a financial plan in place to keep BlackBerry relevant and profitable. BB10 and BES adoption is nowhere near where it should be, so why should they constrict themselves when they can stretch things out for the meantime? BlackBerry should buy as much time as it can while continuing to develop their divisions. BB10 and BES12 (soon to be released) are superior in every way and remain the future of BlackBerry, no question. I suspect that when the Z3 is released and later this year, the Classic and whatever other rumored devices, along with the OS 10.3 update, that there will be an appropriate marketing strategy in order but designed for specific markets. John Chen has spoken about maintaining and building strong relationships with carriers and partners, which will be key if BlackBerry hopes to be successful in anyway.
Be encouraged enthusiasts. BlackBerry is running on all cylinders and will continue to fight with everything they have intelligently.
The decision to focus on emerging markets with low-cost devices such as the Z3 and the enterprise market with high-end devices like the Q20 — both catered to demand — is the only move BlackBerry can afford to make right now but also, most importantly, plays into their strengths. This is a very necessary and healthy move if we hope to see BlackBerry's cash flow return to profitability. If you think about it, the strategy — though simple — is elusively clever. Instead of jumping in the middle of the highly competitive and costly consumer market and blowing everything and trying to compete with other corporate giants who can afford to burn hundreds of millions of dollars, BlackBerry is approaching tangible markets on opposite ends. Trying to compete in the consumer market right now would be trying to ice skate uphill. If BB10 adoption proves to be successful in those two markets, then what we could possibly see in the long run is a "squeeze" on the market spectrum with BlackBerry having a reasonable influence on both enterprise and emerging markets respectfully growing closer to the highly competitive middle consumer market. Of course this is too far away to tell if it can be executed but it's a possibility to ponder.
In the meantime it's a good sign that anything BlackBerry is making is still selling even if it's BBOS devices and BIS services. We all agree mistakes were made in the past few years with BlackBerry management, products and services but hindsight does very little in regards to foresight — save for what not to do and what doesn't work. Be encouraged enthusiasts. BlackBerry is running on all cylinders and will continue to fight with everything they have intelligently. Let's just hope when everyone in the world with a legacy device is ready for an upgrade, that BlackBerry will be in a position to offer them a better home than the last.
Article Written by Jubei Raziel
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