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95 Blackberry: Is there still value? By Seth A. Schachner, Managing Director, Strat Americas www.stratamericas.com Lost in the coverage of Blackberry’s appointment of a committee to seek strategic options: the notion that there is still real value in the company, both as a vehicle for content and for the enterprise. Blackberry also has ongoing potential to hold on to market share in emerging markets, where it is traditionally strong. Blackberry has clearly had its lunch eaten by Samsung and Apple smartphones in developed markets. While its handsets led in some emerging markets like Argentina, Venezuela, and parts of Asia and Africa, this may have camouflaged the company’s longer term issues. Blackberry’s market share has now started to erode globally, too, even in Canada, its home. Behind this is the continued growth of Android, new local smartphone competitors in big markets like China, and the promise of a lower priced Apple handset. The smartphone market is neither easy to penetrate nor sparse: there are roughly a dozen major smartphone brands available in developed markets, but some say Apple and Samsung usurp more than 95% of the profits in smartphone handset sales. Competitors like Sony Mobile, HTC, LG, Motorola, and Chinese brands like ZTE are left with crumbs. Imagine how these competitors try to plot new product road maps in such an environment. And beyond the US & Europe, top of the line smartphones are unaffordable for many consumers, so lower priced “feature phones” or newer classes of “social phones” make up the bulk of the market. (These mimic some, if not all, of the features of a top of the line handset like the iPhone.) A key challenge for Blackberry will be to play to this part of the market. Its BB10 is too high priced, though, so the company must look to its new, lower priced Q5 (which comes with a traditional keyboard) as a vehicle to retain or grow share in emerging markets. One example of this is Blackberry’s 8520, an “entry level” smart phone released four years ago, which is still strong in some emerging markets. W D M


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