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BlackBerry CEO unfairly mocked for questioning tablets’ dominion

John Cox | May 2, 2013
BlackBerry CEO Thorstein Heins mentioned in a Bloomberg interview Tuesday that he thought that "In five years I don’t think there’ll be a reason to have a tablet anymore." He was quickly denounced for ignoring the iPad, not owning up to the failure of BlackBerry's own PlayBook tablet, and in general for "trashtalking" tablets and "being hopelessly out of touch."

Among other things, Heins reveals that the upcoming annual BlackBerry Live user conference, May 14-16, in Orlando will reveal some of BlackBerrys attempt to create a compelling service-value proposition for mobile users.

BlackBerry CEO Thorsten Heins Says Tablets Not A Good Business Model, Evidently Forgetting About iPad mocks the headline to Darrell Etheringtons story at TechCrunch

Heins shouldve stuck to specifics, however, as he went way overboard and came off as though he was losing touch with reality in the interview as quoted by Bloomberg, with broad sweeping statements like In five years I dont think therell be a reason to have a tablet anymore, and [t]ablets themselves are not a good business model, Etherington proclaims.

But a closer look shows Heins has a firmer grasp on reality than Etherington. Heins is surely correct when he says that very few companies can make money on the hardware. His comment is a clear reference to Apple, because Apple is one of the very few companies, and maybe the only one, with a tablet product that returns a very high profit. Trying to imitate or catch up to Apple in hardware profitability, because of the latters highly integrated and capital-intensive approach to products, is impossible for a company like BlackBerry in todays market (as it is also for Apples other tablet rivals so far).

Thats why Heins argues that BlackBerry, and possibly any tablet company, needs a service-value proposition on top of the device itself. Amazon seems to believe exactly the same thing: its not releasing sales figures for its Kindle tablet line, but its aggressive pricing shows its not even trying to make money on hardware; and its integration with Amazons service offerings are exactly the kind of service-value proposition that Heins says is necessary.

That combination made Amazon the No.3 tablet vendor in the fourth quarter of 2012, trailing Samsung and Apple, according to IDC data presented by A key part of Samsungs success in both tablets and smartphones lies in its extraordinary spending level for advertising and sales promotion. [see "The cost of selling Galaxies, continued" by Asymco's Horace Dediu.] Even combined, Amazon and Samsung sold 9 million fewer tablets than Apple in that quarter.

I think that the tablet form factor clearly has become popular for a good reason, and I dont think that this form factor is a passing fad, says Rich Adduci, senior vice president and CIO, global information systems, for Boston Scientific, Marlborough, Mass., where he oversees an iPad deployment in the thousands.

I think that the tablet provides a different way to perform tasks that previously could only be done with a PC and also allows you to do many things that could never be done on a PC&for those reasons I believe tablets will be around for quite some time.


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