Yesterday it hit the newswire that ex Blackberry (BBRY) CEO Jim Balsillie had sold all of his remaining stake in Blackberry on December 31, 2012. Balsillie held about a 5% stake in BlackBerry. By the end of the day, however, BlackBerry shares were up almost 8%, with another 3% gain after hours. The shares will most likely drop back down today as a larger sell-off begins. Balsillie's move to sell is yet another strong indicator that BlackBerry 10 will fail, ultimately sending the once great phone manufacturer into obscurity. Currently there are a variety of factors working against BlackBerry, and the combination of these spell doom for the corporation.
While Blackberry 10 may have gotten off the ground in Canada and the United Kingdom, it has failed to launch the devices in the United States. The company delivered the devices to U.S. carriers later than it should have, and they are still undergoing testing. There hasn't been a hard date set for when major U.S. carriers will start selling the phone, but it is estimated to be around the middle of March. Currently the only way to get a BB10 device in the United States is to shell out $1000 to boutique phone service provider Solavei. The later release date of the BlackBerry 10 devices bring it closer to the release of powerful new phones such as the Samsung Galaxy S4 and the "S" iteration of the iPhone 5.
The reviews are out for the BlackBerry OS, and technology bloggers are presenting a mixed bag of opinions. While the virtual keyboard on the Z10 is fluid and responsive, the phone's hyped up BlackBerry 10 operating system is not up to par. BlackBerry Hub gets filled with too many different messages too quickly, all the while not offering visual cues for when you get new messages. BlackBerry has also done away with the status bar for running applications. What this means is that when you have a program open you can't even see the time of day or the battery status of your device. On top of this, BlackBerry 10 lacks "push" functionality for email. Push is when you get notifications "pushed" to your phone; the second you get an email, you're notified. What BB10 offers is an email check every 15 minutes. This is outdated technology. To exclude such an important feature, especially for the type of customer that BlackBerry is trying to appeal to, is a serious blunder. BlackBerry 10 was hyped up to be a game changer, but has turned out to be a lackluster piece of software.
Mobile applications, or "apps," have become the lifeblood of the smartphone industry. Everywhere people are accessing a variety of apps to do just about anything, and the way that these mobile programs have gripped our lives is undeniable. BlackBerry said that it would be expanding its app store in anticipation of the BlackBerry 10 launch, but a closer inspection shows a serious dearth of popular apps. BlackBerry initiated a campaign to bolster the number of apps in the store to 70,000 by launch, but this has led to a myriad of sloppy ports and incompatible programs. One blogger searched through the app store to find the apps that he most commonly used on his phone, and found none of them. These weren't unheard of, esoteric programs: there were no apps for Gmail, Chase bank and Netflix. Not even "Angry Birds" was available. This is a clear indicator that developers have long stopped caring about BlackBerry.
Lack of Enterprise Usage
BlackBerry has long sustained itself by selling its phones in bulk to enterprises. Times are changing, however, and businesses no longer want to associate themselves with BlackBerry. Back in late 2011 the iPhone had already overtaken BlackBerry for enterprise usage. Now companies are opting for a "bring your own device" policy, with 74% of companies (Q1 2012) already allowing people to use their own devices. As companies strive to cut costs and acquire better technology for themselves, less of them will use BlackBerry. Since enterprises once constituted a huge portion of BlackBerry's profit, the lack of demand from companies will push the corporation into its death spiral that much faster.
The investing world held its breath for the release of BlackBerry 10, and we are now met with disappointment. BlackBerry has chosen to enter the wrong market at the wrong time and will not succeed as a result. Even the ex-CEO got out while he could. Do not go long BlackBerry.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.