BlackBerry to Customers: Seriously, We're OK!
BlackBerry may seem a bit like the Black Knight of Monty Python fame, exuding confidence in the face of a good many flesh wounds, but it still has a few limbs left. "While BlackBerry is in a strategic positioning battle, the firm is fundamentally sound," noted Joseph Pastore, a business professor at Pace University. "Good cash position combined with no debt is a powerful statement."
Oct 16, 2013 7:00 AM PT
BlackBerry issued an open letter on Monday in an effort to assure customers that it still has a viable future.
Consumers might have concerns after reading recent headlines surrounding BlackBerry's business, the company acknowledged. Most recently, those headlines revealed that it lost US$1 billion in its latest quarter and initiated layoffs of about a third of its workforce.
Those headlines have also reflected its struggle to compete in the smartphone market. The BlackBerry 10 OS and the new devices running it represented the company's high hopes for a turnaround, but they have not done well in the market.
BlackBerry's customers might be confused about the next steps the company intends to take. It recently signed a letter of intent to go private through a deal with a consortium led by Fairfax Financial Holdings, which already holds a large stake in BlackBerry.
Private equity firm Cerberus may get involved in the bidding, and an SEC filing revealed that the company's cofounders also have been considering a buyout.
Still Strong on Many Fronts
The open letter -- run as a full-page ad in a number of newspapers -- was designed to quell some of the uncertainty. It points to the company's debt-free balance sheet and cash on hand, as well as to its plans to cut back on costs and improve efficiency.
The letter highlights the strengths of BlackBerry's mobile platform, including its productivity and data management capabilities for enterprise customers. It also points to its security, claiming it's recognized as the most secure device, server and global network in the industry.
The letter assures customers that the BBM messaging platform is the most robust mobile messaging service available and will only grow stronger following its upcoming launch on the Android and iOS platforms.
It points out that the company is being up front about the tough competition and the negative buzz surrounding it. It even acknowledges that its platform isn't for everyone -- but insists that its uniqueness is what sets BlackBerry apart from the crowd. Finally, it closes with a plea to consumers to "continue to count on us."
Snagging More Consumers
There is still a customer base -- albeit a relatively small one -- that is counting on BlackBerry, said John Feland, CEO and founder of Argus Insights.
BlackBerry's main problem right now is that it hasn't been able to expand that user base amid the rise of iPhones and Android devices.
"For a core segment, BlackBerry is still the belle of the ball," Feland told the E-Commerce Times. "The challenge is how to broaden that message to a larger market while rumors of their imminent demise are scaring consumers from the brand."
The letter isn't necessarily trying to snag new consumers, said Joseph Pastore, professor emeritus at Lubin School of Business at Pace University. The company understands that is part of its overall challenge right now, but this letter is an effort to maintain loyalty in its existing customer base.
"They cannot stay silent," Pastore told the E-Commerce Times.
"They did a good job of highlighting their strategic plans and initiatives," he added. "While noting they are a player in the social network market, they continue to stick with their knitting in the area of enterprise mobility management and [underscore their] devotion to ensuring a dedicated, high-quality security system which is vital to the commercial market."
It may not win over any iPhone users, but the message should serve as a solid reminder that BlackBerry is still in a position to compete -- or at least has the fighting spirit to do so, Pastore added.
"The messages are fundamental and begin with a powerful observation that while BlackBerry is in a strategic positioning battle, the firm is fundamentally sound," he noted. "Good cash position combined with no debt is a powerful statement."