A key question in the "smartphone wars" is whether BlackBerry will be able to maintain its market share, which has held up remarkably well amidst all the excitement around iPhone and Android. But RIM is looking increasingly vulnerable. The company needs a better "what's next" story, in order to hold onto their enterprise base and re-energize their perception in the consumer market.
Buying a BlackBerry is sort of like that old adage of "you'll never get fired for buying IBM." BlackBerry continues to be, by a good margin, the best and most efficient messaging device. But I'm starting to see cracks in the BlackBerry magic, especially as users have upped the ante in what they want from a smartphone. It has been some time since there was true excitement around a new BlackBerry device or feature, and there is a growing sense that their product development is not keeping pace. This palpable frustration can be seen in the various BlackBerry user forums and blogs. The most common complaints center on the inferior browsing experience and usability elements--such as synching--that seem increasingly clunky and out of date. BlackBerry's App World, launched a year ago, has so far been a disappointment--although there are some excellent individual apps for BlackBerry.
The cracks can also be seen in operator and developer relationships. For example, a year ago, it seemed that RIM had developed a "special relationship" with Verizon, with the omnipresent "get more BlackBerry out of your BlackBerry" ad campaign. But Verizon has been increasingly spreading its bets, starting with Android and the $100 million ad campaign for Droid in the fourth quarter, support of Palm, and their anticipated launch of new Windows-based devices. There has always been sort of a love-hate relationship between RIM and the operators. Their teams have at times worked closely on certain devices and product initiatives, and BlackBerry of course has been the lead product into the enterprise market and the source of enormous revenue over the years. But the $7 or so per month that RIM extracts from data service plans is both unique in the industry, and an increasing source of friction with the operators. Additionally, some of RIM's own products, such as IM, have been caught in the cross-hairs of certain operator product initiatives.
Over the past year, RIM has put a lot of effort into its developer program. I'm not sure it's paying off yet. Many developers I talk to are putting more resources into Android, and, believe it or not, are getting excited again about Microsoft (given what they've seen on Windows Phone 7). A good example here is navigation and leverage of location capabilities. This should be a sweet spot for RIM's target market, but the experience on Apple, Android, and select Nokia devices has catapulted ahead.
Finally, competition is intensifying. Apple has been steadily narrowing the gap on enterprise capabilities, with more likely in their fourth iPhone product, expected to be announced in June. But the most anticipated battle will be with Windows Phone 7, later this year. RIM has been left virtually uncontested in the enterprise market. But Microsoft's renewed bet on mobile is serious--almost a complete re-think, and from everything I've seen and heard, Windows might finally be "a contendaah."
Please don't perceive this as a "dump on RIM column." I think the company still has an enormous opportunity. RIM is more entrenched in the enterprise market than many believe. Companies have made significant investments in BES servers, BlackBerry support and in supplying Blackberries to large swaths of their workforce. This gives RIM a good runway to convince enterprise customers about what's next. Here would be my priorities:
- Quickly catch up on the "table stakes." A good browsing experience is becoming a minimum requirement on smartphones. RIM will lose ground as more devices are equipped with HTML5. Better support of the Mac platform is becoming more important, and could stem some defections to the iPhone among Mac users. A refresh of the UI is also becoming a pressing need.
- Develop an enterprise flavor on applications. In contrast to the 100,000-plus apps for the iPhone, focus on better, more serious, and premium-priced apps, or versions of apps for business customers. Think of what a customized version of the Wall Street Journal, perhaps bundled with Barron's, could be on the BlackBerry. Another category to focus on is how to more effectively integrate location into enterprise-centric and business productivity applications. Or how about a highly integrated, customized version of LinkedIn for the BlackBerry?
- Re-engage with the operators. RIM has an opening here, given that the Apple App Store and Android Market are for the most part happening around the operators. RIM and the operators have the channel into the enterprise market, and the ear of enterprise decision makers. On the consumer side, there's an opportunity to tap into operator back end and billing systems, and to develop applications that keep both RIM and the operators relevant in the applications game, be it through a storefront, or preloads/widgets.
- Focus on BlackBerry as the standout messaging device. BlackBerry has always been the leading mobile email device, but messaging is about a lot more than e-mail these days. RIM has kept pace with social networking integration, such as Facebook and Twitter, and its Messenger product has been an under-recognized success in mobile IM. There is ample opportunity to remain innovative and leading edge in messaging--taking advantage of unique assets such as keyboard form factor, push, security, efficiency, and Exchange integration. Integration with myriad messaging and social networking platforms, while effectively leveraging context, presence, and location, are ways to deliver a differentiated experience.
- Message around speed and spectral efficiency. RIM's roots are in delivering a speedy and bandwidth-efficient experience to users. With concerns around capacity utilization and the likelihood of usage-based pricing, "Zippiness of experience" could resonate with operators and consumers alike.
This is a time for RIM to articulate where BlackBerry stands out in the increasingly crowded smartphone market. Apple has the user experience DNA and is building an entire ecosystem around the iTunes distribution platform. The end game for Android is to help Google extend its advertising business to mobile. For BlackBerry, I think it's an opportunity to: expand its franchise in the enterprise; partner more closely with operators who are worried about competition from Apple and Google; and in the consumer market, to reinforce its position as the leading messaging and personal productivity platform.