The One Thing BlackBerry Must Do to Reboot

US News

There's a new smartphone with clever new features, a new company name, a new marketing strategy and even a hot new spokesmodel. But none of that will determine if the moribund BlackBerry returns from the dead.

Here's what will: Whether the once-dominant company can regain its cool factor.

After many delays and predictions about the BlackBerry's demise, the smartphone maker has surprised critics with an attractive new product and other changes meant to signal that it's pulling off the bandages and bolting out of the hospital. The company officially changed its name from Research in Motion--which only stock analysts tend to recognize--to BlackBerry, which is known by practically everybody, whether they love or hate the phones.

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More clever still, the company has named pop superstar Alicia Keys as its "global creative director," whatever that means. Like millions of others, Keys says she dumped her BlackBerry in favor of an iPhone a couple of years ago. But she has since gone back to BlackBerry, which is obviously what the company needs a lot more of its former customers to do.

There's also a new operating system and two new phones, the flagship Z10 and a less expensive Q10 variant. Early reviews are generally positive. "They're getting people to pay attention again," says Carolina Milanesi of technology-research firm Gartner. "At least they're proving they get what they need to be doing."

Actually making people pay attention will be harder. BlackBerry once held 85 percent of the smartphone market. That has plunged to about 3 percent. The stock, which peaked at $148/share in 2008, now trades around $15/share, nearly a 90 percent plunge. BlackBerry has become grouped with AOL, MySpace and Palm as examples of breakout tech companies that quickly faded or are approaching irrelevancy.

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To revive itself, BlackBerry has introduced new products that highlight the company's dwindling strengths while also attempting to innovate. BlackBerry products long appealed to corporate IT departments because of the company's proprietary data network, considered more secure than others. While that may still be the case, many companies have decided they don't need the most secure networks, and consumers buying their own phones are even less concerned about security. So BlackBerry has spun its reputation for security into new features meant to keep personal and work information separate, on phones that people use for both personal and business use.

The new devices also feature a digital, touch-screen keyboard that fills in words as you type and becomes more intuitive as it learns your personal style. There's also a kind of time-lapse camera feature that lets you pick the best shot in a reel that spans a few seconds, along with other features not found on competing devices from Apple, Samsung and others.

Reviewers seem to be impressed. Influential Wall Street Journal columnist Walt Mossberg called the makeover "a radical reinvention of the BlackBerry" and said it could get the company back into the game. David Pogue of the New York Times gushed over the Z10's features and called the phone "delightful"--a word that may never have been used before to describe a BlackBerry.

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But building a cool product isn't nearly enough in the intensely competitive and fast-changing smartphone market. Gaining back lost market share will require tons of marketing support, plus agility and follow-through BlackBerry hasn't shown in the past. Success also depends upon intangibles that determine whether gizmos catch on with celebrities (including ones who don't get paid for endorsements), along with hipsters and other trendsetters.

The biggest shortfall is nothing new for BlackBerry: A dearth of apps, compared with competitors. BlackBerry says there will be 70,000 apps for the Z10 when it launches in the United States in March. Android and the iPhone each boast about 10 times as many. BlackBerry, aware of that vulnerability, says a utility will allow developers to easily convert Android apps to the BlackBerry, which might help the company catch up.

An important sign of success, says Milanesi, would be enthusiastic marketing and advertising support from carriers such as Verizon and AT&T. If that happens, it will help boost sales, which would encourage developers to spend more effort creating apps. More apps, in turn, would give users more things to do with their BlackBerries, and more reasons to love them. That would truly be something new.

Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.



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