With the recent public display of Blackberry 10, RIM is back in the news. I believe that RIM has made many missteps and has been too slow to respond to changing market dynamics. Thus, my view is that RIM’s future looks dim and that they will struggle. Last week, my travels took me to Toronto and I met with a knowledgeable person (Let’s call him Bob for simplicity although that was not his real name.) who had a different opinion. To be clear, Bob was not a RIM employee but was knowledgeable about the company and the industry. I thought that it would be interesting to share his perspectives here because they are so different from mine. It is up to the reader to decide whether they agree or disagree.
In short, Bob believes that RIM will not only survive but that BBOS10 will thrive as the number three OS in the market behind iOS and Android. This position also suggests that Windows Mobile Phone 7 will lag behind and be stuck at the number four (or worse) position. Bob felt that RIM’s success would be based on the company’s ability to provide value to multiple stakeholders. Here is a summary of his positions.
Obviously the goal of carriers is to generate revenue while creating a positive customer experience and minimizing data usage. The last point is critical because one of the big challenges with smartphone customers and iOS users in particular is that they use massive amounts data. This creates significant network congestion and is frequently used as justification for why carriers can no longer provide unlimited data plans. The argument for RIM is that their unique Network Operations Center centric model includes unique efficiencies that significantly reduce cellular network utilization without impacting customer experience. The result is that a Blackberry uses significantly less bandwidth (1/3 was the number I heard) as compared to an iPhone while accessing the same web content. This benefit is enabled by unique technology in the Blackberry platform that is missing from iOS, Android and others. Bob believes that this differentiator is so compelling that carriers will actively support and promote RIM both now and into the future.
Many businesses are concerned with the security of their critical emails and other corporate data. Bob argued that the encryption built into the Blackberry platform is far superior to anything available in iOS and Android and thus for corporations that really care about security, RIM is the only real choice. Additionally, he believes that RIM’s new Blackberry Fusion application will further expand RIM’s market position and extend its management and security excellence to non-BBOS platforms like iOS and Android.
Devices thrive based on the larger application ecosystem. Apple was the pioneer here with their AppStore and Google has followed with Play. Bob believes that BB10 provides one of the most developer friendly environments including unique technology to address the following:
- Gaming – The new development BB10 platform offers a unique environment that is optimized for gaming performance by providing low level hardware access and graphic acceleration.
- HTML – The platform also offers simplified HTML5-based development options and so developers looking to port web-based applications will have little difficulty.
- Native SDK – While the first two are new, this third option has been the basic development model for years. It provides low level OS access and enables the fastest performance for traditional applications. Of course the trade-off is additional development complexity.
- Emulation – Bob had a Playbook and stated that it was trivial to run Android applications on the tablet with an emulator. Thus a fourth option would be to productize this functionality and to attempt to leverage the Android ecosystem.
The core argument is that RIM’s development environment is easier and more powerful than the competition.
Bob suggested that device manufacturers are aggressively looking for alternatives to Android or WMP7. His theory is that BB10 provides a significantly differentiated smartphone platform and that RIM will aggressively license BB10. The hope is that phone manufacturers will adopt BB10 resulting in a much larger ecosystem of phones including units with physical keyboards and touchscreens. The argument further suggests that the range of phone options will allow RIM to access new market segments and accelerate phone adoption.
Historically, RIM has focused on corporate customers with consumers taking a secondary priority. Bob believes that the combination of the enhanced application ecosystem (due to simplified development as described above) and the range of phone hardware options (due to multiple device manufacturers) will jump start consumer interest in the platform. Obviously if consumers aggressively adopt the platform then RIM could get in a virtuous circle where application developers follow which drives more consumers due to the enhanced application ecosystem, etc…
In conclusion, Bob believes that even with its many missteps RIM is still poised to be a strong number three in the market. My opinion is far more pessimistic since RIM has clearly made many mistakes and I do not believe that they can recover in a timely fashion. What do you think? Do you agree with Bob or with me?