Doubts Resurface over BlackBerry’s Future

News Article - Friday, 12 April 2013 13:05

By: Kerry Butters Category: Connectivity

Analysts have expressed doubt over whether BlackBerry will be able to regain a foothold in the smartphone market, following a drop of 7.8% in the company’s shares on Thursday.

Whilst the stock reached a 52-week high in January, it’s since lost around a quarter of its overall value. BlackBerry's latest handset, the Z10, is already causing concerns over discounts given for the handsets, which were designed to take on Samsung’s Galaxy range and Apple’s iPhone.

The company’s new operating system, BlackBerry 10 (BB10), was launched in January but only began selling in the US in March. This has led to investors raising concerns about the viability of "regaining its lost glory and stealing back market share in the U.S. market”, according to a report from the Calgary Sun.

"(The) recent optimism surrounding the ability of the new BlackBerry 10 products to get BlackBerry back to long-term profitability will ultimately prove unwarranted," Pacific Crest analyst James Faucette wrote in a research note.

"We see a combination of market maturity, more aggressive pricing from competitors and smaller resources than those of competing ecosystems frustrating the comeback attempt," he added.

Faucette believes that BlackBerry’s attempts to turn its fortunes around will fail due to having an unfamiliar user interface, less apps than Android and Apple and not enough compatible technology. This, he says, means that any opportunity the company had to sell up had now passed.

"We believe BB10 is likely to be DOA,” he went on to say, "we expect the new OS to be met with a lukewarm response at best and ultimately likely to fail.”

However, Paradigm Capital’s Gabriel Leung disagreed, pointing out that: "The company has significantly improved its ability to attract developers to build apps for the BB10 ecosystem, which we view as a key catalyst for success.”

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