IS BLACKBERRY A DINOSAUR

Story first appeared in USA TODAY.
With this week's announcement that Research in Motion is cutting 10 percent of its workforce, the BlackBerry death watch moved into high gear.
The smartphone that's been a corporate status symbol for more than a decade faces a rapidly declining market share amid new competition, while the company has suffered a series of missteps in both strategy and execution.
Even the management shakeup announced on Monday wasn't what Wall Street had been hoping for. RIM's stock is down more than 50 percent this year.
With Apple's iPhone and smartphones based on Google's Android operating system stealing RIM's thunder in both the consumer and corporate spaces, the BlackBerry's outlook appears grim.
One analyst says surviving in the context of being a formidable force across the industry as it was in its glorious days is not going to happen.
That doesn't mean all is lost for RIM and the BlackBerry platform. It's still wildly popular in international markets, and smartphones powered by a new operating system are coming next year.
But analysts say the company needs to act quickly and effectively, which it's had a hard time accomplishing over the past several years.
Judging from the numbers, it's obvious that fewer people want BlackBerrys.
According to market research firm comScore, RIM held 24.7 percent of smartphone subscribers in the three-month period ending in May, down 17 percent from a year ago.
In the corporate market, traditionally RIM's bread and butter, IT departments are increasingly allowing individual users to choose their own mobile devices, and more of them are choosing iPhones.
The company has taken notice. RIM is set to unveil smartphones based on version 7 of the BlackBerry operating system.
But critics have long complained that BlackBerry OS has gotten long in the tooth, especially compared with sophisticated platforms like Android and Apple's iOS.
Next year, RIM will unveil BlackBerry devices based on QNX, the operating system that powers RIM's PlayBook tablet. QNX promises to deliver performance and features that better compete with iOS and high-end Android devices.
But RIM has been snakebitten by a series of execution missteps, including product delays and releasing new devices that seem half-baked, such as the PlayBook's curious lack of built-in e-mail capabilities.
Most alarming to Wall Street, there's a sense of sluggishness in a company that operates in a rapidly changing industry.
One analyst stated that with QNX they have a real next-gen operating system. He added that those phones that come out next year will be much more competitive with the high end of the market.
But Doradla, who maintains a "Hold" rating on RIM shares, says there's little reason to be excited about the BlackBerry platform in the near term.
He says the question is between now and early next year when the QNX comes in, what is holding a customer to stick with a BlackBerry phone
Dominance Lost
Despite the near-term gloom, analysts point out there are factors that work in RIM's favor.
Although BlackBerry smartphones are falling out of favor in the United States, they're still wildly popular overseas.
Also, businesses have made significant investments in BlackBerry Enterprise Servers, so they're not likely to abandon the platform completely.
McCourt sees the corporate market playing out as a duopoly with BlackBerry and the iPhone. Doradla points out that given RIM's strong presence in corporate enterprises, the company is likely to remain viable in the long term.
Earlier this year, RIM opened its BlackBerry Enterprise Server to enable support for iPhone and Android smartphones, enabling IT departments to centrally manage those devices on a single system. The move addresses the reality that more organizations are supporting multiple mobile platforms.
But Mark McKechnie, an analyst at ThinkEquity, believes the company needs to go farther by opening up its network operations center, or NOC, to other smartphone platforms.
He says they've created this great infrastructure that all the corporations use to secure their e-mails. They collect about $5 per month per subscriber. But if you're going to have a problem competitively with your handsets, then that asset—the NOC—is a declining asset, he added
In a recent research note, McKechnie said that of ThinkEquity's $6 earnings-per-share estimate for fiscal year 2013, $4.25 comes from NOC recurring revenue, $1.75 from the handset business.
McKechnie says you could still have RIM be a niche supplier to the BlackBerry servers, but the market's a heck of a lot bigger when you start throwing in the Apples and the Androids and whatever other technologies people want to bring in from their homes and run on the corporate network.
The fall from being the dominant provider to a niche player is nothing new in the technology industry. But analysts say in RIM's case, it's a situation that could have been avoided.
All in all, these were big strategic mistakes that were made years ago and now they're feeling the pain. Ironically they've figured that out now, but it takes a few years for the new strategy to take hold. They probably don't have more than two years to re-engage the high end of the market before their brand is permanently damaged here.