Why BlackBerry Is Struggling Despite Its Enormous Strengths: One User's View

| About: BlackBerry Ltd. (BB)
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BlackBerry (BBRY) has made yards in attempting a comeback to the days of yore when it commanded attention in the smart phone space. The BB10 operating system is slick, functional and powerful. The Z10 and Q10 phones are very well designed with an outstanding browser and many very useful features such as Hub, Peek and Time Shift. The Android emulator runs most Android applications extremely well, and the BES 10.1 mobile device management (MDM) system is the gold standard in the industry. BlackBerry's decision to make BBM communications available on competing platforms is a welcome recognition that the user base of BBM is more important than its lure as a feature exclusive to BlackBerry handsets, and the innovation of channels has enormous power.

So what went wrong?

BlackBerry is suffering from a handful of decisions that it will come to regret. In summary, they include:

  1. Failing to make BES 10.1 backward compatible, forcing customers to use both BES 5 and BES 10.1 to support legacy handsets as well as BB10 devices. Sure, BlackBerry provided Autosync, but that feature is no more functional than the features in competing MDM systems and ignores the reality that BES 5 provided instant email, world class security, seamless access to corporate networks, and so on. Making BES 10.1 capable of supporting iOS and Android phones was a big step ahead, but one brick short of a load. Making it supportive of BB7 and Windows phones might have made it so compelling it would have become the dominant MDM platform. Failing to do so in my view can only be seen as an attempt to force customers to take expensive steps that benefit BlackBerry at the expense of the customer's user experience. Bad decision.
  2. Allowing developers to put insignificant applications in BlackBerry world. Sure, BlackBerry wanted to have as many applications as possible, but miring BlackBerry world with thousands of applications of limited value watered down the value of the applications library and made BlackBerry look desperate. I would rather have seen 5,000 or 10,000 really useful applications with the major ones present than 120,000 applications where the majority were of limited interest to anyone and made users wade through reams of icons to find what they needed.
  3. Failing to make the Android emulator a "one click" experience instead of leaving it to users to figure out how to side load Android applications. Not that side loading is challenging - it is a trivial exercise and the applications work very well. But for the vast majority of users who are non-technical, even the term "side load" is a barrier. Why not simply put the very few steps needed to load any Android application into a single icon with a few dialogue boxes that even the novice users could manage with ease. Simplicity is the key, as shown by Apple's (NASDAQ:AAPL) success selling relatively weak devices with an elegant interface and a rich library of applications and content.
  4. Failing to keep the "back" button and mini-track pad on the Q10 and Q5 devices. Anyone who uses a BlackBerry bold knows how useful these navigation aids are and how familiar they have become to BlackBerry users.
  5. Failure to make BlackBerry desktop compatible with BB10 devices instead of a completely new BlackBerry link that is not compatible with BB7 devices. It is a royal pain for users who have both BB7 and BB10 devices to have two desktop programs to manage them.

The result is that many of the most loyal BlackBerry users have left for Samsung (OTC:SSNLF), Windows or Apple devices. Others have simply kept using their BB7 phones.

None of the deficiencies I have listed require magic to resolve and it is by no means too late. BlackBerry needs to focus less on touting the engineering excellence of its system (which is undisputed) and more on the user experience. The improved content for consumers on BlackBerry 10 devices is impressive with music, movies, TV and news from many sources much of which was unavailable on BB7 handsets. The clarity of the screen and the speed of the browser have few equals. The corporate user's ability to separate personal and corporate data is unique and valuable. The company has so much to offer it is sad to see it on the wane.

I remain long BlackBerry calls, a residual from a bullish position taken not that long ago when I had a view that BlackBerry would enjoy more success than seems apparent today. I am more of an observer than an investor today, since I expect those calls to expire worthless and I don't see the company taking the steps needed to advance its competitive position. But it can. And, it should.

Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.