TORONTO—When Research In Motion Ltd.'s new BlackBerry goes on sale in the U.S. Friday after a delay of nearly two months, it will be backed by mostly positive reviews, increased investor confidence and RIM's biggest marketing budget ever for a product rollout.
But it will also confront a much more competitive market than it faced during previous BlackBerry launches—one in which smartphone- market leaders AppleInc. AAPL +0.14% and Samsung Electronics Corp. 005930.SE -0.14%have rocketed ahead of RIM in both market share and sales. The two also have significantly more cash than RIM to maintain their leads, meaning RIM may no longer be fighting to be a smartphone leader but rather to simply keep a place at the table.
Bloomberg
Thorsten Heins, chief executive officer of BlackBerry, attends the launch of the BlackBerry Z10 smartphone in Sydney, Australia, on March 18.
Related Video
Will the new BlackBerry devices be able to entice consumers to turn away from the competition? Engadget editor-in-chief Tim Stevens joins The News Hub with a forecast. Photo: BlackBerry.
Research in Motion CEO Thorsten Heins talks with WSJ's William Connors about what to expect from the BlackBerry Z10, how much RIM is staking on the launch, and what's in store for company beyond the new phones.
RIM executives acknowledge the gap. They have also refrained from setting specific sales goals for the launch, which starts Friday, when AT&T Inc. T -0.11%will begin selling the Z10, the first of two new BlackBerrys running on RIM's new BlackBerry 10 operating system. But the Z10 sells for roughly the same price as the iPhone 5 and Samsung's Galaxy SIII, pitting it head-to-head with those devices. The Z10 is already available in such markets as the U.K. and India.
"Our objective and that of our carrier partners is that very quickly we emerge as a strong No. 3," says Frank Boulben, RIM's chief marketing officer . "I expect to see a lot of excitement in the coming days in the U.S. market."
RIM's hold on the lucrative U.S. smartphone market has fallen from close to 50% in early 2009 to 5.9% this year, according to comScore. This week Gartner estimated that even if RIM's new phones are well received, the company won't reach 5% world-wide market share by the end of 2016. A series of delays pushed the Z10's launch a year past its expected date, and the U.S. launch comes two months after other markets got the phones.
But RIM is now spending lavishly. It rolled out a Super Bowl commercial for the first time, and it has plastered newspapers and billboards with ads and hosted parties with celebrities and musicians in cities like Austin, Texas, and Los Angeles in a bid to win back a toehold in the U.S. market.
"They've got an attractive device and a good operating system, but ultimately for them to succeed they've got to get some excitement and buzz in the consumer segment again and it's an open question whether they can do that," says Gartner analyst Van Baker. "I don't think they have any chance of getting back to where they were, but if they can get 5%-6% market share, ultimately that's a successful business model for them."
More on BlackBerry
- A New BlackBerry—But More Delays 1/30/13
- Mossberg: BlackBerry Reinvents Itself 1/30/13
- CEO Heins on BlackBerry's U.S. Delay and Marketing Costs 1/30/13
- Digits: BlackBerry Z10 Review Roundup1/30/13
- New BlackBerry on Sale in U.K. 1/31/13
- New BlackBerrys Go on Sale in Canada2/05/13
- Live Coverage of BlackBerry
Analysts' estimates vary widely—from 300,000 to 1.5 million—for how many new BlackBerrys RIM shipped in the month they were available during the fiscal fourth quarter, which ended March 2. This month RIM announced that an "established partner" had ordered one million Z10s, but it didn't identify the partner or specify the time period of the order. RIM will report earnings March 28, but analysts aren't expecting a clear picture of how sales are going until the following quarter.
Apple, by comparison, sold five million iPhone 5s on their first weekend of availability last year, and Samsung shipped 10 million Galaxy SIII phones in their first two months last summer. Few expect RIM to ship that many phones, but a round of modest analyst forecasts have helped double RIM's stock over the past six months.
Bloomberg News
Potential customers examined the BlackBerry Z10 last week at its consumer launch in Jakarta, Indonesia. It goes on sale in the U.S. on Friday.
RIM also isn't likely to match Samsung and Apple's marketing heft. Earlier this year, Chief Executive Thorsten Heinssaid RIM would spend "in the hundreds of millions" of dollars on world-wide marketing for the company's new phones. In 2012 Samsung spent $401 million and Apple spent more than $333 million on U.S. marketing alone, according to consulting firm Kantar Media. RIM spent around $35 million in both 2011 and 2012.
RIM is spending more than it did on previous launches. It hosted parties at a recent technology conference in Austin, Texas, and in Los Angeles Wednesday night. Also on Wednesday, Mr. Heins appeared on CNN's "Piers Morgan Tonight," touting the phone.
But RIM's window for grabbing attention may already be closing. Last week Samsung unveiled its latest Galaxy smartphone, the S4, at a lavish event in New York. Macquarie Securities analyst Kevin Smithen said he spoke to several smartphone buyers there from "large financial and consumer-products companies" who said they were considering the Z10. But "they appeared to be impressed by the [Galaxy] S4," he said in a note to clients, and may delay their Z10 decision until they can evaluate the S4.
No comments:
Post a Comment