BlackBerry Z10 is innovative but will users connect?

Sales above three million units of BlackBerry Z10 in the first three months on sale will send BlackBerry shares sky high, but anything below one million will not be well received by investors.

It is clear that the new BlackBerry Z10 device delivers some of the most efficient, accurate and engaging ways to access messaging and social networking services to date. These services are always just one gesture away from the user regardless of the other tasks the phone is performing. The BlackBerry Z10’s comprehensive and yet intuitive typing experience, the architecture of the messaging hub, the speed of execution and multitasking capabilities make it stand out from the best smartphones currently available on the market. Its LTE performance has also been first rate, at least in North America.

The BlackBerry Z10 also allows business users to separate their professional and personal profiles thanks to Balance, a newly released feature of the BlackBerry Enterprise Server. This feature, together with the newly rebranded BlackBerry World store, plus the music and video hubs and 70,000 available applications, will enable the BlackBerry Z10 to make a good start in developed markets and could potentially challenge devices such as Samsung Galaxy S III and Apple’s iPhone.

With the superior messaging experience that the BlackBerry Z10 offers, and its highly integrated enterprise features, BlackBerry could well win back the hearts of business users, particularly in Europe and North America. In emerging markets, the situation is different as the majority of BlackBerry users tend to opt for affordable devices with an average selling price around US$200. Given the high-end specifications of BlackBerry Z10, it is highly unlikely that the typical Blackberry users in these regions will be able to afford it. Instead, RIM will attempt to win new premium subscribers in these regions, a market segment currently dominated by Apple and Samsung.

Without a doubt, the Blackberry Z10 needs to seduce business users and advanced consumers, as this audience is often more concerned about whether the device enables high productivity and gives scope for creativity and less concerned about price.

However, in the consumer segment, the challenge BlackBerry faces is not so much related to the device’s performance or its appeal but is more about how consumers will react to its brand new approach to the user experience. With a significant majority of consumers now using smartphones on a daily basis, expectations have become a direct product of their experience with their current device. Given that consumers are generally slow to adapt to new user experiences, they might find it hard to connect with Z10’s user interface from the first touch. The minimalistic design of the phone means it does not feature the traditional physical ‘buttons’ users are accustomed to – the home button, the back button and the search button. Instead the phone relies predominantly on soft touch and gesture for navigation.

No doubt it will be challenging for BlackBerry to push the new device to consumers in retail stores. Sales representatives often prefer to sell as many phones as quickly as possible, preferably the ones that don’t require too much effort in educating the consumer. This happens each time a new platform is introduced to the market. For example, the shipments of iPhone, Android and Windows Phone devices did not exceed 1.1 million, 0.8 million and 0.9 million, respectively, in the first three months after they were launched.

So, given the very fast growing smartphone market, BlackBerry should aim to sell at least one million units of the new device in its first quarter. Anything below this would call into question the company’s ability to execute its marketing strategy while anything above three million units would be a spectacular performance, which will undoubtedly resurrect both the consumers’ and the investors’ confidence in the BlackBerry brand.


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