Now that the litigation is over, it's back to business in mobile email
BlackBerry creator RIM has just paid $612 million see off NTP. Now it must figure out how to fend off Microsoft.
This could be a decisive year. Microsoft is getting up a head of steam in the mobile market while demand from BlackBerry's natural constituency, the corporate sector, is waning.
RIM's sales in the first quarter were up 39% year-on-year, but were still shy of analysts' expectations. Guidance for the current quarter is also short of forecasts.
RIM chairman Jim Balsillie has foreshadowed an extension into the regular consumer market later this year with devices that support IM and games. RIM has buttressed itself by expanding its portfolio with IP-PBX integration, VoIP over Wi-Fi, and IM, mapping and portal capabilities through Google and Yahoo.
Against this, Microsoft trumpets the sale of 500,000 devices to the US Census Bureau as the shape of the mobile industry in the future. That might seem counter-intuitive; census-takers hardly need a high-speed smartphone for data entry.
But a big enterprise tender like this is not just about devices. Scott Horn, general manager for Microsoft's mobile and embedded devices group, says it also covered the supply of desktop software and servers. Well, who's going to beat Microsoft at that game‾
In fact, Horn's big pitch is that as mobile screens become more and more cluttered with icons, the game will come to Microsoft and its software strengths. Faced with complexity, users and operators will turn to MS. Irony lives!
Faced with complexity
But as well as talking up Redmond's corporate mobile prospects, Horn took the opportunity to talk down some rivals in an interview last week.
'The software experience on most phones is fairly poor,' he said. 'Most of the industry, on the device side, is pretty bad at integrating hardware and software.'
Horn will get an argument with Nokia devotees on that one, not to mention a few of those who have struggled with Windows on the desktop.
That's hardly going to matter to Microsoft as it brings into play 18,000 Windows Mobile applications, six million Windows developers, and hundreds of carrier partners and device manufacturers.
Where RIM could truly feel the pain is in pricing. Its devices routinely sell for $300 or more, even with a contract. Thanks to operator subsidies, Microsoft smartphones are selling almost as low as $100.
A new Texas Instruments dual-core chipset for MS could reduce standard retail prices to around the level. Those phones will be on the market next year, Horn expects.
Yet for all that, RIM has everything to play for.
For all the years it has been trying - Convergence recalls interviewing Microsoft's then mobile pointman, Phil Holden, at CTIA in 1999 - Redmond still has only a mere six million devices in the market.
That compares with the 400 million plus shipped by Nokia alone last year.
RIM made its business among corporate customers because of its high level of security.
That's a reputation that Microsoft's deep pockets and marketing strengths haven't been able to buy.
Finally, Microsoft's size and clout can actually be a weakness. In a word: Vista. Microsoft's new desktop OS is indefinitely postponed. It's simply too big and too complex.
In the mobile device world, MS faces the classic innovators' dilemma. RIM knows it can have its next upgrade shipped while Microsoft's software teams are still in meetings.
Microsoft has huge software and financial strengths, and a presence in every office in the world. But to win in this segment, Microsoft might have to shed some of its baggage.
Robert Clark is a Hong Kong-based technology journalist and analyst [email protected]