Can A New COO Help Save BlackBerry?

July 21, 2014 by Jon C. Ogg

BlackBerry Z10BlackBerry Limited (NASDAQ: BBRY) has a turnaround that remains caught between a rock and a hard place. The consumer move into iPhone and Android smartphones has sucked in almost all but the most loyal enterprise and corporate users. The move out of manufacturing and designing most of its own phones was one game-changing move, but now comes news that BlackBerry has named a new Chief Operating Officer.

News broke on Monday that Marty Beard will become COO, to lead marketing and development on the applications around the BB10 operating system. Beard recently ran LiveOps, a cloud-based software provider for businesses to manage their customer service/call centers.

Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOGL) are front and center here. After all, it is these two companies which have taken over the smartphone market.

Here is where the rub is. 24/7 Wall St. recently named Blackberry as one of ten brands that will die by the end of 2015. Can a new COO help curb this brand’s demise?

Beard is replacing Krtistian Tear after he departed BlackBerry in November. This departure was on the heels of John Chen taking over as CEO. We had been operating under the assumption that BlackBerry would not name a new COO. Maybe management decided that all of the post-layoff efforts could use some extra supervision and spear-heading.

ALSO READ: 10 Brands That Will Die in 2015

Another issue to consider here is that Apple just announced in the last week that it was partnering with International Business Machines Corp. (NYSE: IBM) to build applications. As IBM targets corporations and enterprises almost solely, many investors feared that this was Apple sticking a fork into the BlackBerry heart. In fact, Blackberry shares fell from $11.30 ahead of that news down to as low as $9.70 after the news.

Where this gets really interesting is that the new COO announcement is ahead of new device launches with new mobile management software with secured messaging. The target here is enterprises – government, corporations, and other organizations.

The big question to us is not just whether Blackberry can shrink itself back into profitability. The brand is already drying up as far as consumers are concerned. The company’s market share has fallen from 20% close to 2% in the last five years.

What BlackBerry has a win on by far is security. In the day and age of hacking and government snooping, somehow some way BlackBerry has not been able to convince buyers about the “Remember Us?” lesson. It almost feels as bad as PC-maker Gateway not capitalizing after the September 11, 2001 terror attacks that it was the only all Made in America brand. We will know in a week or so whether BlackBerry’s security-focused presentation in New York in the next week will have mattered or not.

Google Inc. (NASDAQ: GOOGL) remains a threat here. Actually, it is perhaps THE threat. Google is now targeting Android at the next round of emerging market customers. This is for a sub-$100 smartphone targeted at the 5 billion people who don’t have a smartphone. Google even took on Alan Mulally to be on its board of directors.

Predicting the death of a brand is never really fun. The problem is that predicting what happens when your market share drops from 20% down to 2% – a 90% penetration drop – feels a bit like shooting fish in a barrel. We could even argue that BlackBerry is already dead as a consumer brand.

Palm once held a dominant share as well, and it also had its own operating system with a dominance in the corporate and enterprise unit. Does that sound at all similar to BlackBerry? Palm is now history, even after Hewlett-Packard Co. (NYSE: HPQ) bought it, closed it, and turned WebOS into an open source project with a goal and current situation that almost nobody knows about.

ALSO READ: How Investors and Analysts Value Apple Ahead of Earnings

Can a new COO save BlackBerry? If so, it won’t be easy. We will know soon enough. Stay tuned!

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