As the BlackBerry World TurnsAs the BlackBerry World Turns
Despite what you may have been reading in the trade press, the company is far from dead.
May 9, 2011
Despite what you may have been reading in the trade press, the company is far from dead.
I spent most of last week at BlackBerry World (formerly Wireless Enterprise Symposium), RIM's annual industry event, and despite what you may have been reading in the trade press, the company is far from dead. They made several important announcements (including one truly surprising one), and focused considerable attention on the recently introduced PlayBook tablet.
The keynotes by co-CEOs Jim Balsillie and Mike Lazaridis were upbeat, but privately, RIM execs acknowledge the challenges the company is facing. The stock tumbled more than 13% to $49.16 the Friday prior to the show, based on revised sales forecasts, and analysts at Jefferies & Co lowered their rating two notches to "underperform". Last Friday, research firm comScore reported US smartphone market shares for the first quarter putting RIM second with a 27.1% market share (down 4.5 percentage points from December) behind Android's 34.7% and just ahead of Apple's 25.5% share.
The company is still a powerhouse with 17,500 employees worldwide and selling through 550 carriers in 170 countries; traffic on their BlackBerry Messenger service grew 332% last year. The company has scale and resources, but they can't seem to shake the market perception that they are "stodgy" now that Apple and Android have burst onto the scene. They are taking steps to address the marketing problems. RIM's chief marketing officer, Keith Pardy left the company in March after a two-year stay and on the eve of the PlayBook launch; he has not been replaced. Last Friday, Roger Baxter was appointed VP of brand and marketing communications, replacing Paul Kalbfleisch whose title had been VP of brand creativity.
At the show, RIM announced a successor for the high end Bold 9700 and 9630 dubbed the Bold 9900 (there is also a 9930 for CDMA networks); those devices will ship this summer with the next generation BlackBerry 7.0 operating system. The new version is thinner and slightly wider allowing for a bigger keyboard. The form factor is similar to the current Bold (i.e. display over keyboard), but the big change is the display is now a touch screen. A 1.2-GHz processor in conjunction with the new operating system gives the touch screen excellent performance with pinch, stretch, and all of the other touch-screen gymnastics.
It is a little light on the connectivity side, with RIM opting for HSPA+ (in GSM environments) and EVDO Rev A (in the CDMA world) rather than the "true 4G" LTE and WiMAX. They did get the Wi-Fi right with 802.11a, b, g, and n, and the 802.11n interface can operate in either the 2.4 GHz and 5 GHz bands. The iPhone 4 is 802.11b,g, and n with n in 2.4GHz only (i.e. "useless for corporate deployments"). RIM also included Near-Field Communications (NFC), which could be used for mobile payments or for a variety of other applications.
The really surprising announcement was the acquisition of Munich-based mobile device management (MDM) company ubitexx GmbH, whose product will be integrated with the BlackBerry Enterprise Server (BES). The big news is that RIM will now provide device support for Apple iOS and Android-based devices. This is a major change for RIM (and one that many of us had been calling for), hopefully beginning their transition into an "enterprise mobility" company. It also puts them in competition with the other MDM vendors (and RIM partners) like AirWatch, Sybase, MobileIron, and Zenprise.
Right now ubitexx is not a big player in the MDM market with about 125 employees, but that will likely grow substantially with the BlackBerry army behind them. Customers already value RIM's security and management capabilities, so the ability to add iOS and Android management will be a big plus. According to RIM's VP of enterprise software Pete Devenyi, the ubitexx server will run in parallel to the BES, and major management functions for both BlackBerry and non-BlackBerry devices will be managed through "a single pane of glass" using an interface called "Fuse". Under the covers, Fuse will route BlackBerry management messages to the BES, and non-BlackBerry requests to the ubitexx server.
There was also a lot of talk about the PlayBook, though it is clearly still a work in progress. The BlackBerry Desktop Manager for Mac doesn't support the Playbook as yet, and AT&T has refused to allow the BlackBerry Bridge application that links the Playbook to a BlackBerry smartphone. In a comment to Wired magazine, AT&T said "We have just received the app for testing and before it's made available to AT&T customers we want to ensure it delivers a quality experience." There are reportedly 3 people in North America who actually believe this is anything other than an attempt by AT&T to squeeze a few more bucks per month out of their BlackBerry customers. In the meantime, as a Mac user with an AT&T BlackBerry, I'm not in a happy place with my new PlayBook.
There were countless demonstrations using the PlayBook's HDMI interface, which displays beautifully on a big screen TV. Microsoft's Steve Ballmer even showed up to announce that Bing will be the default search engine on the Playbook; it takes about 5-seconds to change the default to Google or Yahoo. Despite the fact that the hall was jammed with enterprise customers, there was no mention of Lync; I guess Steve was stuck in "Xbox mode".
When you use the PlayBook, the response really is fantastic, even with multiple applications running, and the 7-inch form factor is a different experience from the 10-inch tablets like Apple's iPad or the Motorola Xoom. Acknowledging the software deficiencies, they demonstrated pre-production versions of the email, contact, and calendar applications, which, along with the Mac desktop, should be available this summer.
There's a lot going on in BlackBerry land, and there seems to be a real drive to get the train back on the track. The 9900 will be a great addition, but they still need more juice in the Torch touch screen line to keep up with iOS and Android. They are also looking at additions at the low end of the product line (i.e. the Curve) to ease the pain of transitioning feature phone customers to smartphones; according to comScore, only 31% of US mobile users have smartphones. The ubitexx acquisition and the commitment to provide management support for Apple and Android devices is a real step in expanding the company's vision of what they want to be.
RIM's products are as solid as they come, and it will all come down to execution. That execution will need to address marketing first and foremost, but it will also require ongoing product innovation and executive direction. RIM faces major challenges in the smartphone business they helped create, and will be up to Messrs Balsillie and Lazaridis to drive the change that’s needed.
