What Yoda Would Tell BlackBerry

In one of his wiser moments, Master Yoda of Star Wars fame (voiced by puppeteer Frank Oz) opines: “Do or do not. There is no try.” These are probably the same words of wisdom that the Jedi master would have imparted to Research In Motion if that company, like Luke Skywalker, had pledged “to try.”

The tribulations of the smartphone maker have been well documented in the press, news reports, etc. And while there are pockets in the world where RIM’s signature device, the BlackBerry, still holds sway—witness the popularity in Nigeria epitomized by the movie Blackberry Babes—the company has been bleeding share in most of world despite its vaunted security and the popularity of BlackBerry Messenger. The ability to secure sensitive corporate information on other smartphones, and the reduced costs to companies with bring-your-own-device policies, has made other smartphones attractive to corporations. Meanwhile, the plethora of apps available for Android devices and iPhones has made these more attractive to employees (and consumers) to carry. Together, these factors, along with the absence of the coolness factor, have contributed to the precipitous declines in RIM’s fortunes. Not surprisingly then, much was riding on RIM’s various announcements last week.

One announcement concerned RIM’s decision to change its name to BlackBerry, the product it is most closely associated with. In many ways, the decision makes sense. Corporate customers may not care much about the name, but consumers relate more to the BlackBerry name than they do to RIM. Having one name to rally behind makes sense from that perspective. Of course, this could mean that subsequent product launches with names other than BlackBerry may have difficulty gaining quick traction; this seems to be an issue for the future, however. Importantly, other companies have done this. While the name changes from Minnesota Mining and Manufacturing to 3M, or from Kentucky Fried Chicken to KFC, or from Lucky-Goldstar to LG seem more obvious, Dayton-Hudson did change its name to its best-known brand, Target. A common concern with name changes is that the brand could end up losing the equity associated with its previous name. However, given RIM’s situation, the negative fallout is unlikely to be fatal.

The bigger announcement, however, was the launch of two new devices, the Z10 and the Q10, both of which run the new BlackBerry 10. That’s the operating system driven by the QNX Software acquisition, with the new user interface courtesy of the Astonishing Tribe purchase. Most of the attention focused on the fact that the Z10 looks similar to the smartphones BlackBerry has been trying to catch up to. Positive differentiating features are likely to be the new virtual keyboard, and the Hub and Flow services on the device. At the same time, BlackBerry continues to be at a disadvantage as far as the number of apps is concerned. This is a negative differentiating feature it will have to contend with.

From the customer perspective, BlackBerry needs to accomplish two things: retain its existing base of 80 million or so subscribers and acquire new customers, either first-time smartphone buyers or switchers from other platforms. The new devices are likely to hold some appeal for current subscribers. Current customers are dealing with a company they are used to (which could minimize switching costs), and furthermore, they now have a parity product that has many of the features of its rivals and a few more. So they need not feel left behind holding a BlackBerry.

Acquiring new customers is a far trickier proposition. First-time buyers of smartphones, especially those in developing economies, are likely to be price sensitive due to the absence of handset subsidies in many of these countries. (I wrote about this in an earlier post about a lower-cost iPhone.) Such buyers are likely to gravitate to lower-cost Android devices since the BlackBerry, iPhone, etc. are beyond their financial reach. On top of this, it does not appear that there is a “killer benefit” that will sway current users of other platforms to switch to BlackBerry. This is likely to be its biggest hurdle in expanding the subscriber base.

Ultimately, the success of BlackBerry depends on how much the combination of the device, the operating system, the user interface, and the apps differentiates the product from its rivals and turns out to be a game changer for the company. Again, to echo the sentiments of the wise Yoda: “If no mistake have you made, yet losing you are . . . a different game you should play.”

Was BlackBerry’s Super Bowl ad a bust?

To create buzz for the product in the United States, BlackBerry ran an ad during last week’s Super Bowl. One might question BlackBerry’s choices.

First, the ad talks a lot about what the new device will not do—not what it can do, and do differently. One might argue that such copy serves to tease customers into wanting to find out more. But do consumers have the time to do so? If the main purpose of the ad was to generate awareness among potential consumers about the impending arrival of the new devices, the large Super Bowl audience would have helped achieve this goal. On the other hand, if the idea was to introduce the country to the new devices, focusing on the specific benefits provided might have been a wiser use of the airtime.

Second, the devices will not be available in the US until sometime in March. Is it a good idea to generate interest for a product and not have the product to deliver? Of course, if BlackBerry has figured out that there are many more contract renewals in March, this is not necessarily a bad thing, but it might come back to hurt the company. At a minimum, the company needs to ensure the presence of trial units in retail stores for those who would like to get a sense for the touch and feel of the new devices.

The latest in celebrity branding: Alicia Keys for BlackBerry

BlackBerry, the company formerly known as Research In Motion, made a series of announcements last week. I’m not entirely sure Master Yoda would be impressed—or wooed by celebrity.

One buzzworthy moment was the introduction of former self-described “iPhone junky” Alicia Keys as BlackBerry’s new creative director. She, along with other artists such as filmmaker Robert Rodriguez are slated to produce content for the devices. (The move follows the decision by Microsoft to use the singer Gwen Stefani as a spokesperson for the Windows phone). Not only does this move pique the public’s interest in the brand, but it could also signal that it is OK to switch away from the iPhone.

Of course, it is also unlikely that most customers are being paid as much as Alicia Keys for switching to the BlackBerry. The value of such a move for BlackBerry’s customers is still to be seen.

Pradeep K. Chintagunta is the Joseph T. and Bernice S. Lewis Distinguished Professor of Marketing at Chicago Booth.