Are BlackBerry Subscriptions In Downward Spiral ?

BlackBerry 10 smartphone

After three days outage in the last year, incessant market share decline and users’ resentment  dragged RIM to nine-year lows. Just before writing, RIM’s stock price is on the rise US $7.0; Definitely, good for shareholders. Until two year ago, the company was considered as one of the pioneer smartphone manufacturers, but this time, it’s struggling to regain its market share due to delays in versions of BlackBerry phone lines, market missteps and augmenting growth of Apple and Android’s smartphones.

However, RIM’s CEO–Thorsten Heins–said during his ‘BlackBerry Jam Americas Keynote’, the company has succeeded to add about two million new subscribers in its most recent quarter. Until the quarter ended June, RIM had about 78 million subscriber base and now, it has some 80 million. Of course, it would be another pleasant news for the company’s fans and investors.

Despite of these, prior to the launch of BlackBerry 10 device, RIM’s CEO really doesn’t have much to show investors or enthusiasts, except glimpse of the much-delayed devices. This time, the company is quite aggressive to set up strong mobile ecosystem around, and that’s why, the company hosted an event on Tuesday to encourage developers to create software application for BlackBerry platform. Definitely, everyone is knowing the fact that RIM is currently in a tough spot; The company’s market share has collapsed and market capitalization has reached less than $4 billion.

Ahead of January this year, RIM started to focus on reinvigoration of the company and decided to layoff weary workforce, streamlined new phones, slashed the cost of the devices and endeavored to make stronger presence in emerging markets. It’s reported that demand of cheaper BlackBerry devices is still doing well in emerging markets including Indonesia and the Middle East.

However, an addition of new subscribers is great news for investors, but it could also be a caveat because the subscriber base has mounted up in the emerging markets that are being driven by some pretty subsidies. Undoubtedly, these subsidies will kill ‘average selling price’ (ASP) of BlackBerry device.

During BlackBerry Jam Americas Keynote, RIM’s CEO–Thorsten Heins–said, “We have a clear shot at being the No. 3 platform in the market. Carriers want other platforms. And we’re not just another open platform running on another system. We’re BlackBerry.”

Heins believe that BlackBerry 10 could be a game changer and it would allow the company to raise user base once again in the U.S. and North America, where the company has lost ground to its rivals including Apple, Samsung, Microsoft and others. The CEO also believes that BlackBerry could be third greatest platform in the world after Android and iOS.

In Q2 2012 (ended June), RIM shipped 7.8 million BlackBerry phones and about 260,000 BlackBerry PlayBook Tablets, while Apple shipped 26 million iPhones and 17 million iPad during the same quarter. It’s also true that the subscriber base of the company is rising in the emerging markets, on the other hands, it’s declining in North America.  It’s pretty-known that BlackBerry mail and messaging services are two main sources that are driving enterprise customer base and they accounts for one-third of the company’s total revenue. Of Course, RIM could also leverage on its two major driving source along with upcoming BlackBerry 10 devices to extend its global presence. Indeed, it would be big gaffe to say “RIM subscription in downward spiral”.

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