Will BlackBerry ditch BB10 OS?
- BlackBerry's BB10 OS has caused a lot of damage to the firm and needs to be strongly dealt with.
- The handset maker has various options to still save the dying OS.
- BlackBerry needs to decide quickly what it wants to do with BB10 otherwise its market share erosion could continue.
BlackBerry (NSDQ:BBRY) has made several strategic moves over the past year to bolster its overall turnaround, but there is one critical part of its business that the beleaguered smartphone vendor has taken very lightly over the past 2 years – the BlackBerry 10 operating system. There is a reason to believe that BlackBerry should either invest time, man-power and financial resources aggressively in this platform or chop it off entirely if management truly wants its turnaround efforts to succeed over the long term time frame. Let’s take a closer look.
The Financial Impact Of BB10
I’d like to say that BlackBerry 10 is a fine operating system. Its Hub integration is unparalleled, its operating system is extremely stable and it is one of most secure mobile platforms available to us in today’s time. But all that caters to is a small niche of business users wanting highly productive, but no frill experience.
See, the thing is, BlackBerry 10 platform faces an acute shortage of apps. The company announced back in 2014 that there were only 370,000 apps available for its BB10 users. The handset maker was running a “Portathon” program back then, offering developers $100 for porting Android and iOS apps, over to BB10. But the handset maker hasn’t released any app count since then, so I’m led to believe that ever since the Portathon was terminated, its app portfolio stopped growing.
(BlackBerry Market Share Progression, Source: Statista)
This isn’t just some random irrelevant number. In fact, there are thousands of posts in several forum threads that show agitated users abandoning the BB10 platform due to the shortage of apps. This also resonates with the handset maker’s continuous loss of market share over the recent years. BlackBerry was once king of enterprise mobile offerings, commanding a substantial 21% market share in 2009, but its hardware situation has deteriorated so much now, that most research firms have stopped monitoring its sales contribution.
The loss of handset market share, in turn, led to the year-after-year decline in its handset sales. After all, if users were abandoning the BB10 platform, and moving over to Android/iOS, this also meant that they were abandoning its handsets too. The decline in its service revenue may have been mitigated by the rapid growth of software revenue over the recent past, but there hasn’t been any business division that would offset the continued sales decline of the bleeding hardware division.
This continued loss of market share has started a vicious cycle of avoidance for the handset maker. Users are abandoning BB10 due to the shortage of apps, and on the other hand, BB10 developers are abandoning the platform due to the shortage of potential clients (BB10 users).
Now, you may have heard about BlackBerry’s decision to exit the hardware business, but that won’t solve the mess that BB10 has created. The thing is, BlackBerry will outsource the development, designing and distribution of its future devices. Its current portfolio of BB10 devices (such as Z10, Z30, Z5, Passport) might be trimmed going forward but the company hasn’t said anything about completely discontinuing its existing BB10-based hardware portfolio. So, the company will indeed continue to sell some of its hardware in 2017 as well.
Restricting the community
The BB community (developers and users) could potentially fix the problem on their own if they had the right tools, but unfortunately, it looks like the smartphone vendor isn’t focused on its BB10 platform anymore.
For starters, BlackBerry announced its 10.3.3 update last year in September and said that it would be out by March 2016. But the company managed to roll out the update only last week. After 13 months of waiting and 9 months of delay, all its users and developers received were a few security fixes, NIAP certifications and some minor UI additions. To put things in perspective, Google and iOS are coming out with entirely new operating systems in this time frame but BlackBerry could come up with only a minor patch.
Secondly, one can argue that APKs can be installed on BB10 OS since it's an Android fork, so the shortage of apps can be fixed. But let me assure you that it’s not the case.
See, there are various Android apps that use Google Services to function (eg: Uber, Zomato, Clash Royale etc). You can install these apps on your BB10 devices but they won’t always function. As an ex-BB10 user, I can also tell from experience removing Google Services dependencies from these apps is a very complex procedure and average users might find the process very difficult to understand and execute.
Then, there’s another problem. BB10 is using a dated Android 4.3 run-time environment that was released back in 2012. Now that Android has progressed to version 7, several apps are cutting support for older Android runtimes. This essentially means that BB10 users won’t be able to install modern APKs on their devices. So, this option might also close down for the BB10 community.
The point that I’m trying to make is that BlackBerry is facing an acute shortage of apps, and the fixes available to mitigate the issue, are getting outdated and might not necessarily work in 2017. The company needs to do something about its BB10 OS, otherwise, its remaining base of loyal users might abandon the platform as well. (See Also: BlackBerry Stock: BlackBerry Ltd (BBRY) Might Gain From The Tesla Motors Inc Hack )
What can BlackBerry do?
For starters, the company needs to break the vicious cycle of avoidance that I explained earlier in the article. This can be done by either getting more users onto the BB10 platform by offering BB10 devices at steep discounts. Or if that isn’t feasible, then the company should encourage developers to build more apps for its BB10 OS. This can be done by temporarily slashing its 20% commission applicable on all transactions processed through BlackBerry App World. Doing either of these two would help the platform by a great deal.
BlackBerry could also go in talks with Google so that the latter permits the use of latest Android runtime versions in future iterations of BB10 OS. This would let users install modern APKs on their devices and that, in turn, should mitigate the app crisis that BlackBerry has been facing all these years.
Or, if BlackBerry can’t do anything at all, then it should consider ending the BB10 OS entirely and put the dying platform out of its misery. This would allow the company to completely exit its hardware business (Z10, Z30 etc) which has been hemorrhaging cash over the recent years.
With dismal hardware sales, I don’t think that any OEM would want to license the BB10 OS anytime soon so that prospect is currently shut for the company. Therefore, BlackBerry needs to decide whether it wants to revive its platform, let it die a slow death or euthanize the platform for good. Otherwise, its hardware sales would continue to languish and hurt its shareholders going forward.
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