BlackBerry: Tablets dead in five years
LARGE screens will replace tablets within five years, claims Thorsten Heins, BlackBerry’s chief executive, as he trumpets Z10 phone success.
Mr Heins said that “In five years I don’t think there’ll be a reason to have a tablet anymore. Maybe a big screen in your workspace, but not a tablet as such. Tablets themselves are not a good business model.”
Tablets have powered Apple and increasingly Samsung to huge profits, so Mr Heins’ suggestions will be met with incredulity in some quarters. But diminishing profit margins on iPads could also indicate that the market will become less attractive over time.
The suggestion that there is a limited future for tablet computers could also indicate that Mr Heins plans to shelve a follow-up to the smartphone maker’s ill-fated PlayBook device.
The PlayBook, introduced in 2011, was panned by critics for debuting without built-in e-mail, delivering the tablet a near-fatal blow. BlackBerry took a $485 million charge later that year to write down unsold inventory after shipping as few as 150,000 PlayBooks in the third quarter of 2012.
Mr Heins said in January that he would only consider a PlayBook successor if it can be profitable, and reiterated yesterday that a BlackBerry tablet has to offer a unique proposition in a crowded market. In five years, I see BlackBerry to be the absolute leader in mobile computing - that’s what we’re aiming for,” Heins said, empahsising the importance of phones over tablets. “I want to gain as much market share as I can, but not by being a copycat.”
In a separate interview with Bloomberg Television yesterday, Heins said he was optimistic about prospects for BlackBerry’s new Q10 phone, which sports a physical keyboard and debuted in Selfridges over the weekend in the UK.
“We have very, very good first signs already after the launch in the UK,” Heins said. “This is going into the installed base of more than 70 million BlackBerry users, so we have quite some expectations. We expect several tens of million of units.”
BlackBerry stock has increased 32 percent this year on speculation that the BlackBerry 10 lineup can help fuel a comeback.
The company is counting on a wave of upgrade buying from BlackBerry users who prefer a physical keyboard to drive Q10 sales and help revive revenue growth. While the touch-screen Z10 sold a million units in its first quarter that ended March 2, in line with analyst estimates, the company’s stock has experienced volatility in recent weeks following reports of lackluster demand for the Z10.
Contrary to earlier reports, data from BlackBerry and one of its US carrier partners Verizon Wireless show that Z10 returns are “completely in line” with the industry and “better than previous BlackBerry launches were, so the quality speaks for itself,” Heins said.
Heins also said he is still exploring the potential licensing of the BlackBerry 10 operating system to other companies. A successful introduction of the new phones will “create a certain attraction toward BlackBerry 10, and then whatever comes up, we will entertain any valuable discussion for the company,” Heins said yesterday. “We are still observing and watching that space, and that’s what we will continue to do.”