With iPhone joining the best wireless carrier in North America, and 4G LTE Android devices soon to follow, is RIM's BlackBerry business due for some heavy turbulence?
So, it happened. Today, after years of speculation, Verizon Wireless finally got the iPhone.
A lot of armchair quarterbacking is occurring at the usual suspects, ZDNet included, with the natural follow-on questions. What will this do to AT&T? Can the Verizon network handle it? Is this real life?
Back in June, I tried to answer some of these questions myself. I was dead wrong on at least one assumption, that the Verizon iPhone would almost certainly have 4G LTE capability. It doesn't. Oh well.
I also considered to some extent what the iPhone on Verizon would mean for Android. My thoughts at the time were that it was unlikely to have a long-term effect on the viability or strength of the platform.
Now that we know LTE Android phones are launching in a similar time frame to the new CDMA iPhone 4 and that a 4G Phone is now quite a bit a ways away, I'm much more confident that Android will continue to offer compelling technology advancements that will allow it to differentiate from iPhone as a cutting-edge smartphone platform, as well as maintain if not exceed its share that it established in 2010.
What I didn't think of at the time, however, was what the impact of an iPhone launch on Verizon would have on RIM and the BlackBerry.
The comScore chart above depicts how the various smartphone platforms played out in terms of overall market share at the end of the 4th quarter of 2010.
As we can see, Android share surged over six percentage points, iPhone gained almost a point increase, and RIM lost over four percentage points. And this was without iPhone launching on a new carrier.
With today's iPhone launch on Verizon, these numbers are likely to look very, very different the same time next year.
While there may be some negative impact of a Verizon launch on current Android models initially and for a short time period, the launches of the Droid Bionic, LG Revolution and the HTC Thunderbolt (all of which are among the first crop of 4G LTE phones) are due for sale only a few weeks after the first iPhones are delivered to Verizon's customers and will contribute to Android's growth as well as continue to assert its technology lead.
But what of RIM?
I think it is fair to say that the big gains that Android saw in 2010 have been at BlackBerry's expense, particularly as it relates to consumer smartphone purchases. While enterprise smartphone sales make up RIM's bread and butter, their "starburst" is still very much in consumer. And with the iPhone now at Verizon in addition to AT&T, that share of the consumer pie is going to get smaller and smaller.
Why is BlackBerry losing market share? Because when you compare their BlackBerry OS 5 smartphones on Verizon and other carriers to what iPhone and Android currently offers, it comes up lackluster. And what of OS 6? If you ask our own iGeneration columnist Zack Whittaker, it doesn't particularly resonate well with younger buyers.
Verizon hasn't even launched an equivalent product to AT&T's BlackBerry Torch, which runs on the updated OS 6. Presumably, we'll see some sort of OS 6 successor to the BlackBerry Storm 2 and the Bold, but who other than the most hardcore BlackBerry loyalists are going to want to stick with that platform on Verizon when their contract comes up and iPhones and LTE Android devices are in the offering? I'm guessing not many.
The problem gets only worse from here. Assuming that OS 6 phones do launch on Verizon in Q1 or Q2, will they be LTE-based? Based on what I've been able to determine from various mobile news sites, it seems that the new BlackBerry models will be 3G, like the iPhone 4. Why? Apparently, the LTE BlackBerry phones are only very early in their development processes and the chipset costs are currently too high for RIM's liking.
And if a lack of an imminent LTE offering for Verizon didn't have its share of issues, there's also the fact that RIM has already stated that OS 6 is a stopgap. Eventually, they want to replace it with the QNX-based platform that powers the PlayBook. That's basically admitting to their customers and developers upfront that they shouldn't buy or develop for the current platform because the next one will be so much better.
The problems with RIM don't end with the the BlackBerry smartphone platform, their OS quagmire and how it competes with Droids and iPhones on Verizon. There's also the whole mobile tablet strategy at the company that's seemingly programmed for failure.
On paper, and even in person, the PlayBook is a nice-looking piece of hardware. But it's got a few problems. Firstly, it's not anticipated to launch until the late spring because the platform isn't fully baked yet and even the current SDK is lacking support for a great deal of stuff that developers are asking for. This product will also launch after we expect to see the iPad 2 and also Android 3.0 tablets launch.
Given the announcement of today's iPhone partnership, I think we can also expect that Verizon will be selling 3G-enabled or possibly LTE-enabled iPads along with LTE-ready Android 3.0 tablets such as the Motorola Xoom which have already been announced.
[UPDATE: Verizon has confirmed the existence of a native version of the iPad that will be offered on their network.]
Secondly, it doesn't help that the PlayBook absolutely requires a BlackBerry to be wirelessly tethered to it in order to do native enterprise email.
Given the fact that you don't need to do this on an iPad or a Android device, both of which have native Exchange support and 3rd-party support for other mail platforms such as IBM Lotus Notes, a BlackBerry smartphone tethered to the PlayBook for required email support is practically a boat anchor.
RIM would be smart to change course on the BlackBerry tethering requirement if they expect to stay in the game, in my honest opinion. But that's the least of their problems, considering the iOS and Android Malachi Crunch they're going to have to deal with this year at Verizon, AT&T and other carriers notwithstanding.
Unlike Pinky Tuscadero, I'm not sure RIM will walk away unscathed in the smartphone and tablet demolition derby.
Is RIM and the BlackBerry due for some bumpy weather in 2011? Talk Back and Let Me Know.