Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) (now BlackBerry, stock symbol BBRY) unveiled its new BlackBerry 10 OS and its first two BB10 devices, the touchscreen Z10 and the keyboard Q10, at a global event webcast from New York City, during the week.
Research In Motion’s BB10 launch went as well as could be expected:
Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) announced nothing new or special when unveiling BB10, given that most of the pending features and devices had already become public. The only issue was that there were no surprises up management’s sleeves.
On the positive side, however, the ‘show’ was very well managed. The emphasis was on the users’ experience rather than the device, on features that differentiate BB10 and providing a clear value proposition. The manner of the presentation was also better than expected, suggesting that the management may just be able to sell the BB10 proposition to carriers, enterprises and consumers.
There were several incremental announcements in the event, for example:
1. The introduction of video chat on BlackBerry Messenger (BBM), including most notably screen sharing – something not available on other platforms.
2. Incremental features such as BlackBerry Remember, Picture Editor, and Story Maker.
3. More supported apps including Skype, Amazon Kindle, WhatsApp, SAP, and Angry Birds.
4. The hiring of signer Alicia Keys as Global Creative Director, who was also present on stage. While some apps such as Netflix are still missing, we are expected to become available soon.
Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM)’s approach to launch BB10 with a large number of operators all at once seems similar to Nokia’s initial, and disappointing, strategy. Muted product reviews mean that retail staff likely needs significant hand holding before deciding to push BB10 over easier-to-sell alternatives. With limited resources RIM may find itself stretched too thin.
Analysts from research firm, Nomura, believe refilling channel inventory and the release of pent up demand may boost initial sales. Gradual enterprise adoption of BES10 may see corporate sales accelerate in the second quarter after launch. Initial sales may impress.
Analysts from Nomura doubt that Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) has the scale or skills sets across the vertical value chain to offset the firm’s estimated $1bn in lost services gross profit over the next two years. With the stock on 0.63x FY14E sales (ex net cash), the research firm see significant downside risk to the stock on a medium – to long-term basis.