| | 03-17-13, 10:00 PM Thread Author #1
Interesting interview with BB CEO from Australia
Interesting interview in Australia with Thor.... play attention to comments on Netflix and Instagram
BlackBerry chief lays out survival plan and says iPhone is old news
BlackBerry chief exectutive officer Thorsten Heins has said the rapidly advancing global smartphone market has left Apple’s iPhone in its wake, and predicted his company would have 100,000 native apps available for its Z10 devices in time for the US launch later this week.
Speaking exclusively to The Australian Financial Review, ahead of the local launch of its make-or-break smartphones, Mr Heins said last week’s launch of the Samsung S4, along with a wave of recent smartphone releases had reeled in the lead Apple used to hold in the market.
He said BlackBerry was making early strides in encouraging users to switch from other mobile platforms to its own, that a follow up to its commercially unsuccessful PlayBook tablet was a long way off and that developers of big name apps like Instagram and Netflix were being won over by the reaction to its new BlackBerry 10 (BB10) operating system.
“Apple did a fantastic job in bringing touch devices to market ... They did a fantastic job with the user interface, they are a design icon. There is a reason why they were so successful, and we actually have to admit this and respect that,” Mr Heins said.
“History repeats itself again I guess ... the rate of innovation is so high in our industry that if you don’t innovate at that speed you can be replaced pretty quickly. The user interface on the iPhone, with all due respect for what this invention was all about is now five years old.”
Mr Heins said one area that the new BlackBerry phones had surpassed the iPhone was in the ability to multi-task - running multiple apps at once - meaning that users could work in the same fashion on their smartphone as they liked to on a laptop.
Along with Samsung, other phone makers, like HTC and Nokia have also impressed industry watchers with the quality of their top-end smartphones, leading to questions about whether Apple needs to speed up its release cycle of new iPhones.
“The point is that you can never stand still. It is true for us as well. Launching BB10 just put us on the starting grid of the wider mobile computing grand prix, and now we need to win it,” Mr Heins said.
Enticing app developers
At the launch of phones running on BB10 in January, many observers praised the technical prowess of the phones but suggested that problems, such as a relatively small amount of apps available, would limit its popularity with consumers. It had 70,000 native apps available at launch, which was well above the number offered by Microsoft at the earlier launch of its Windows Phone OS, but well below the number available in Apple’s App Store and the Google Play Android app store.
Mr Heins said he expected 100,000 apps to be available for the US Z10 launch later this week. Much focus has been placed on the fact that popular apps like photo sharing service Instagram and video provider Netflix had not invested in developing BB10 apps, and Mr Heins said negotiations were advancing.
“We are working constantly on getting these important apps on board,” he said.
“I think we are seeing the dynamic changing over time as they want to watch and see how BlackBerry 10 is making it in the market. They want ROI on their development dollars as well. I think this is a very respectful way of looking at your business, and it is our job to convince them that BB10 is a successful platform”
Mr Heins cited the quiet period ahead of quarterly reporting as a reason why he couldn’t disclose early sales figures for the BB10 devices, but said the company had been pleasantly surprised by the number of customers leaving rival platforms to come to BB10.
However he declined to elaborate on which platforms BlackBerry was taking market share off, saying it varied region by region. He said the company was waiting to see how the launch in the US, and other markets, like Australia, went before discussing broader market trends.
Make or break for BlackBerry
He said since the launch of the new devices he had read commentary around the world that suggested the phones represented a “do or die” moment for the company. While he agreed that it was vital to make waves with the phones, he rejected the idea that the company was teetering on a precipice.
“In the context of the financial viability of the company that is where I shake my head sometimes and wonder what everyone is talking about. The company has no debt, I will report pretty good cash position by the end of March in my earnings call, so I think we did a really diligent job in, not just keeping the company afloat, but also bringing it back to health,” Mr Heins said.
He said success with its latest phones was hugely important in the near term, but BlackBerry was focused on establishing BB10 as a broader mobile computing platform.
This has led to speculation that BB10 will be licensed to other device manufacturers, in a similar way that multiple phones exist running Google Android. Mr Heins said this was an option which was being actively considered following a strategic review of the future of the company, but that more attention was currently focused on the global phone launches.
The campaign to boost the image of BlackBerry in the minds of corporate and consumer phone buyers was boosted late last week by news that a mystery buyer had stumped up to buy one million handsets.
Mr Heins said he was bound by a confidentiality agreement not to reveal who the customer was, but that it was a symbolically important milestone for the company.
“It is the biggest ever in BlackBerry history and we are really happy with the vote of confidence. This is huge, those customers take on inventory and a financial risk, and in doing this it shows that they have a very strong belief that they can be successful with BlackBerry 10,” he said.
Shares in BlackBerry (or Research In Motion as it was then) rose earlier this year when an article quoted China’s Lenovo Group as saying a bid for the BlackBerry maker was among the options for boosting its mobile business. Mr Heins said the reports came as a surprise and that the reports seemed to indicate that any interest was only in its early stages.
He said that, despite the share rise at the time, he viewed the speculation brought about by the comments as unhelpful for BlackBerry.
“I don’t know why they are going public with anything like that. To me, this is rumours and speculation. We are running our strategic review, and there are various elements in the review that we are considering, but I don’t want to comment on that,” he said.
“What I specifically don’t like about it, is that it can irritate our investors, our shareholders and our customers. My view always is that you go out to the public when you have something substantial to say. It is not helpful for the industry to have these rumours out there and it is not helpful for my shareholder base either. But you know, people talk, they do what they do and I have to deal with it.”
Taking on tablets
The elephant in the room when talking about BlackBerry’s plans to take on the broader mobile computing market, is its failure to make any impact on the tablet market with its PlayBook device. A limited number of apps, the lack of BlackBerry email and indifferent reviews meant the device largely sank without trace.
Mr Heins admitted the company made mistakes in its inital foray into tablets, saying it had been overly ambitious to launch without native email and many apps, but the decision had come from a desire to show off its operating system. However he said internally it had been viewed as a valuable trial run in getting BB10 right.
In the near future he said the business case for taking a plunge back into the tablet market was not compelling.
“I wouldn’t want to do it the same way again, if I do something around tablets, I want it to be really substantial and meaningful, and quite frankly it would need to be profitable as well,” he said.
“I think the profit pool is very very thin. Kudos to Apple, I think they really managed to own that space, so it doesn’t make sense for me to just take this head on. I need to figure out, for my enterprise customers, for my consumers, for my BB10 audience, what can I do that provides them a mobile computing experience in the form factor of a tablet, which goes beyond just the puristic tablet experience.”
Winning New Customers
Mr Heins is in Australia until this Wednesday, he is spending Monday with a series of events surrounding the local launch of the new phones. However some of his more important local engagements will come in the meetings set up with CEOs and chief information officers of local businesses, who he aims to convince to trust in BlackBerry again.
He spent the weekend speaking with a range of execs at the Formula One Grand Prix in Melbourne, and has a packed schedule of meetings ahead of his departure.
“There is a reason why I took a 23 hour flight from cold Canada to Melbourne and that is because Australia is a very important market for us. Australia is a very innovative and mature market, and is also a very wealthy smartphone and mobile computing market,” Mr Heins said.
“Australia is one of our top ten markets, we need to succeed here, so you will see us pumping a lot of energy into this market.”
One pressing issue is the local banking sector, which is competing strongly for mobile banking supremacy through rival apps. Bank technology executives have conceded that they have all but given up developing apps for BlackBerry, due to the low number of local users.
Mr Heins admitted to being concerned by the perception, but felt it was not too late to turn it around.
“Financial services and banking is really our home turf, but the work we are doing is to demonstrate how well we fit into addressing the BYOD (bring your own device) trend in corporate IT,” he said.
“Our devices are great for the consumer use, while being just as good as the old BlackBerrys for corporate use. If you have an open OS then it is open, you have a ton of keys out there to your main entrance door, government and financial services firms understand that.”