Yesterday’s Wall Street Journal reports new Research In Motion (RIM) devices by this summer, specifically an iPhone-like touch screen smartphone. Presumably, RIM has figured out that it needs a monumental change to compete with the likes of Android and Apple. For sure, a touchscreen BlackBerry 6.0 device that delivers on a completely new UI and evolutionary new hardware (at least for RIM) will leave the industry talking, but for how long and will it be enough?
The details given in yesterday’s report basically described a number of Android and iDevices already on the market (i.e. slide-out keyboard, touch-based UI, personalization of screens and apps, faster Web browser). It’s no coincidence that this news comes out a little more than a week before launch of the iPhone 4. For the first time in a long while, BlackBerry OS is losing market share in North America to other platforms, most notably iPhone and Android. To be exact, RIM has lost almost 16 percent of its North American market share year-over-year, while Apple has gained 5 percent in the same time period. RIM is a company that needs a boost that goes way beyond a white BlackBerry Bold.
RIM’s technological stagnation is nothing new, and perhaps the company has done well enough with its e-mail-based enterprise business that it could afford to take its time perfecting a consumer-oriented product. As investors express concern, the last thing the company wants or needs right now is another BlackBerry Storm disaster. Besides that, analysts continue to praise those inroads the company has already made with regards to the consumer segment.
RIM is second only to Nokia in smartphone device sales globally. That’s more than an established customer base; it’s a lifestyle they’ve created. Still, this is perhaps the most crucial point in RIM’s impressive history. The competition is quickly becoming sophisticated enough that terms like “enterprise” and “consumer” are going away when defining smartphones. One device can do it all. IT departments are getting enough pressure from employees to support the iPhone that they’re finally caving. Some estimate that 40 percent of the Fortune 500 companies now support the iPhone. BlackBerry simply can’t hang its hat on enterprise much longer.
What is perhaps most troubling is how far behind RIM really is. The fact that BlackBerry users will be applauding a standard-sized touchscreen and useable touch-based UI in the summer of 2010 is rather astounding. As far as applications go, RIM has a long road ahead there. An iPhone rival, running a completely new OS and featuring different hardware specs, is a mess of fragmentation just waiting to happen. Imagine if Apple suddenly put out a device with a BlackBerry form factor. How many of the gazillion apps at the App Store do you think would run on that device? Not many.
The fact that RIM’s customer base is as loyal as Apple’s is probably its biggest boon going forward. If you stuck with RIM through the Storm, you’re probably willing to wait around for an iPhone competitor that can hold its own. The possibility of that device being released as a Verizon Wireless exclusive is also attractive.
Perhaps the biggest thing RIM needs to remember if it’s planning on launching a smartphone this summer is that the smartphone game has become as much about mindshare as it is about the actual product. Hype is huge and initial sales numbers are cues for consumers. Reference Sprint’s Evo 4G campaign, Verizon’s Droid campaign and, of course, Apple’s sacred unveiling affairs, and you get some idea of what role advertising plays in bringing a device to market.
Which isn’t to say that it’s all marketing. Once the device is in a consumer’s hand, it has to do at least 90 percent of what you’ve said it will do and do it well, and if it does you have to have enough of them on hand to serve the hungry masses. That’s a lot to live up to for any OEM, but given that it’s RIM we’re talking about, creator of the ever-addictive “CrackBerry,” anything is possible.