After a promising beginning to its thirty-year history, the BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) corporation has experienced a rather desultory time of late. After multi-billion dollar losses in recent financial accounts, the once hugely popular smartphone manufacturer has been engaged in damage limitation in recent years, as the market largely dismisses its ability to recover its market share. It has been quite widely predicted that BlackBerry could cease to be a device manufacturer completely, instead focusing on software and operating systems.
New CEO John Chen has nether stood still nor made cautious moves in the face of such ignominy for BlackBerry, instead launching an ambitious new strategy. BlackBerry has recognized a potential niche in the Bring Your Own Device market, and has already moved to establish itself. Additionally, the company released new handsets at the Barcelona World Mobile Congress, and Chen has promised that there are more exciting announcements on the horizon.
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Damning T-Mobile figures
But a morsel of news has come to light today which threatens to dampen any enthusiasm at BlackBerry at the momentum that they have built up thus far under Chen’s tutelage. The popular retailer T-Mobile has recently been running a $200 trade-in deal, which reportedly attracted a lot of existing BlackBerry owners. Unfortunately for BlackBerry, not many of their previous customers opted to upgrade to one of its newer devices.
T-Mobile report that 94 percent of BlackBerry owners chose to switch to a rival device when offered the opportunity to trade their existing device. T-Mobile has even sweetened the deal by offering a further $50 off BlackBerry trade-ins for existing owners, but this evidently appealed in only 6 percent of cases. This is obviously pretty bad news for BlackBerry, as brand loyalty is not only hugely important in the technology sector in general, but within the mobile strata in particular.
Apple in renowned for inspiring fierce devotion in iPhone users, and a recent survey underlined this only too clearly. As many as 60 percent of those surveyed by SIMOnlyContracts.co.uk described their relationship with Apple as one of “blind loyalty”, while 78 percent stated that they “couldn’t imagine having a different type of phone” than an iPhone. It would appear that the same doesn’t quite apply to BlackBerry owners.
BlackBerry’s 50-50 chance of recovery
The news comes on a day in which CEO Chen has been speaking publicly about how he sees the future of the Canadian manufacturer progressing. In an assessment which can be seen as pretty blunt given the propensity of businesses to talk their own prospects up in the public domain, Chen stated that BlackBerry has a 50-50 chance of success with its bold new recovery and restructuring strategies. Cynics may believe that as the CEO of the company is likely to take the most optimistic view of the subject that the odds of success are actually far slimmer than 50-50.
Chen has a very impressive resume, having successfully turned around Sybase previously, and overseeing the sale of the company to SAP. But formulating a successful strategy for BlackBerry is going to be a huge challenge in the immensely competitive tech marketplace. The figures from T-Mobile simply illustrate the scale of this task.