BlackBerry to Expand BBM Reach

Zacks

In a recent strategic move, smartphones manufacturer, Research In Motion Ltd. *(BBRY) announced plans to expand the reach of its popular messaging service, BlackBerry Messenger (:BBM), to devices running on Apple Inc.’s (AAPL) and Google Inc.’s (GOOG) Android OS (operating system).

Initially, BBM will support smartphones running on Apple’s latest iOS6 and Android’s Ice Cream Sandwich OS, subject to approval from App Store and Google Play. Though BBM will be available for free to iPhone and Android-based smartphones users, they will only be able to add contacts in their list through PIN, email, SMS or QR code scan. Android users can also avail the BBM service using a compatible NFC capable device.

Notably, BlackBerry is popular for its BBM service, which provides free and secure instant messaging service. Currently, BBM has almost 60 million active members, among which 51 million uses BBM on an average of 90 minutes per day.

The company has added a video function to its BB10 OS-based device in addition to the already present voice functions. Initially, the iPhone and Android versions will start with text messaging service and then slowly bring in the video and voice function features.  BBM has to compete with other free messaging services like WhatsApp and Viber, available on iPhone and Android platforms. However, none of them offer video and voice options yet.

Blackberry, once the global leader of smartphones, has been struggling over the last 3-4 years, as they failed to identify consumers’ preferences. The company has been battling in a crowded smartphone market mainly dominated by iPhone and other Android-based devices. The recent success of Nokia Corp.’s (NOK) Lumia has only aggravated the problem.

We believe allowing BBM to become a part of these leading OS platforms will expand its reach to the huge customer base of iOS and Android, as well as significantly improve the popularity of the messaging service. However, the company will lose its unique identity once the BBM service is available on multiple platforms.

Research in Motion Limited currently carries a Zacks Rank# 2 (Buy).

*Research In Motion announced that effective Jan 30, 2013, the company would operate around the world under the name BlackBerry. From Feb 4, 2013, the company’s ticker symbol for trading has been changed from “RIMM” to “BBRY” on NASDAQ. The legal name of the company has not changed, for which the approval of the official change by shareholders will be sought at the company's Annual General Meeting later in 2013. During the time, the company will do business as BlackBerry.

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