First of all if you are not familiar with BlackBerry Messenger (BBM), it is simply BlackBerry's (BBRY) proprietary messaging platform. It is hugely popular and considered one of BlackBerry's key USPs that drove users back to BlackBerry. It is so important to the BlackBerry offering that Heins mentioned that they had made a decision because they were confident in the success of the BB10 platform. Clearly this difficult decision is a tacit acknowledgment of the success of the BB10 platform as Heins feels he may not need this USP any more to attract users. (see comments here)
The market (Scotia and a few other analyst) had expected the big news today might be that BBM would be rolled out ONLY to BES 10 server users. In essence a slow step introduction in cross platform messaging offered as an incentive to enterprise users. What Happened?
Those Canucks Gave It All Away For Free and to Everyone!
The following are the potential victims here:
- PayPal Mobile
I have very little doubt that BBM will quickly and swiftly displace WhatsApp and other irrelevant messaging platforms (Chaton, I-messages etc). However, BBM, with voice and video calls, will also compete with Skype as the desktop version cannot be far away. What may appear to some as a free loving giveaway is actually masking an aggressive land grab.
What is given away for free today will bear fruit tomorrow in several different ways:
Paying for Call Termination (Skype)
I expect BBM to landlines (Call termination) will be rolled out last as they will not want to incur carrier wrath quite yet.
Extending Virtual Mobile via BBM Payments (Indonesian trials started)
The larger the network of users BBM-ing money around, the more valuable this becomes.
Twitter Competition via BBM Channels
This one is a long shot. The motive here is that Twitter is a mundane and dated. People prefer to share pictures, videos and hence "channels." Being limited to 155 characters is a throw away to Twitters roots in SMS and maybe needs to be re-thought. It doesn't cost much to try, so BlackBerry is rolling the dice here, why not?
What Should Investors Do?
This is a bold and risky land grab in a key area of mobile computing that has been surprisingly underserved. Messaging happens to be BlackBerry's strength and they have decided to make a sprint for the finish rather than "play it safe" and leverage it to sell handsets. BlackBerry has announced that they are making a play in three key multi-billion dollar industries and they're going to use BlackBerry messenger to do this. This has the potential to add a huge amount of upside to BBRY should they succeed.
A few short hedge funds, never the ones missing an opportunity for a quick paint job, decided to start a bear raid for a change. This was a feeble attempt at painting this announcement in a negative light or maybe just playing "Sell the news." Their PR flak team members are sharpening their pencils (Wedge, Canaccord, and Pacific Crust) and preparing an assault on Waterloo. Hang tough, today was a great day for shareholders. Management is on the move.