Tech Broiler

Jason Perlow and Scott Raymond

BlackBerry OS 7: How to Osborne your smartphone sales

By | May 2, 2011, 8:14pm PDT

Summary: Research in Motion just announced their new OS 7-based BlackBerry 9900 smartphone, available in June. One minor problem: None of the current or recent generation BlackBerry phones will get the OS upgrade.

Research in Motion just announced their new OS 7-based BlackBerry 9900 smartphone, available in June. One minor problem: None of the current or recent generation BlackBerry phones will get the OS upgrade.

The year was 1982. British computer pioneer Dr. Adam Osborne, a man who has been universally credited with creating the portable computer industry announces the “Executive” OCC-2, the the successor to his current shipping product, the CP/M-based Osborne 1. In fact, over the next year, he also publicly discusses a second, smaller model, the “Vixen”, one which would follow on after that.

Not many people will remember Adam Osborne and the significant contributions he made to help establish the personal computer industry. Many people reading this blog weren’t even born when the Osborne 1, let alone the Vixen was shipped.

However, there is one particular event in computer history in which Mr. Osborne’s name will forever be associated with: The Osborne Effect.

What happened to the Osborne Computer Company after the announcements of the “Executive” and the “Vixen” is now classic business school stuff. Due to the pre-announcement of the newer, better products while the current inventory in the reseller channel was still full, buyers were no longer interested in current products.

Despite the fact that the company had a number of advantages, one of those being that it bundled application and OS software with its computers, Osborne was also facing heavy competition from companies like Kaypro, Apple and IBM, so the timing couldn’t possibly have been worse.

By November of 1983, the company went bankrupt, and Osborne Computer Corporation was no more.

Flash forward to May 2nd, 2011, some 30 years later. Research in Motion, the company which could easily be credited with establishing the modern smartphone industry, announces the BlackBerry Bold 9900 series, which will feature OS 7, the new software discussed by the company’s chief executive, Jim Balsillie on an earnings call, only a few days earlier.

Indeed, according to Balsillie, the company has shortened its revenue outlook for Q2 of 2011 because the products are in a state of heavy transition. Additionally, in order to distinguish itself from the most recent software upgrade, OS 6, which was launched on the BlackBerry Torch in the summer of 2010, the incremental “OS 6.1″ is now to be referred to as “OS 7″.

To make matters even more complicated, this forthcoming OS 7 is not to be confused with QNX, the real-time OS shipping on their PlayBook tablet and will be the future smartphone OS that will be deployed on their handsets in 2012. Because Balsillie’s co-Chief Executive, Mike Lazaridis said so.

Oh but it gets better.

You see, even though OS 6.1… ahem, OS 7 is an incremental improvement over OS 6, the software cannot be over-the-air updated on currently shipping BlackBerry handsets at any of the wireless carriers. OS 7, apparently, has no support for BlackBerry legacy hardware at all.

It’s my understanding that a lot of the improvements in OS 7 are tied to the graphics subsystem and the GPU hardware on the new Bold 9900 handsets. It’s understandable that those features won’t work on older or even currently shipping product.

But now AT&T, T-Mobile, Sprint and Verizon and every other carrier on this planet now has a ton of BlackBerry product sitting in warehouses that has been instantly declared as totally outdated. And as if that isn’t bad enough, everyone also knows that OS 7 isn’t long for this world either, since the way-cool QNX-based phones with the PlayBook’s super-smooth multitasking UI will be out next year.

All of this happening while the company is facing intense competition from sophisticated handsets running Google’s Android, Apple’s iOS, not to mention Windows Phone 7 and HP’s WebOS.

Does this story sound familiar?

I think Dr. Osborne needs to retire as the baton holder for bonehead product pre-announcement. He’s done enough.

The “Lazaridis Lapse” or the “Balsillie Blunder” sounds so much more 21st-century.

Has Research in Motion Osborned themselves with OS 7 and the BlackBerry 9900? Talk Back and Let Me Know.

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Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies.

Disclosure

Jason Perlow

My Full-Time Employer is IBM. I write as a freelancer for ZDNet.

Disclaimer: The postings and opinions on this blog are my own and don't necessarily represent IBM's positions, strategies or opinions.

I own no investments or direct financial instruments in the companies I write about.

Biography

Jason Perlow

Jason Perlow, Sr. Technology Editor at ZDNet is a technologist with over two decades of experience with integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. A long-time computer enthusiast starting the age of 13 with his first Apple ][ personal computer, he began his freelance writing career starting at ZD Sm@rt Reseller in 1996 and has since authored numerous guest columns for ZDNet Enterprise and Ziff-Davis Internet. Jason was previously Senior Technology Editor for Linux Magazine, where he wrote about Open Source issues from 1999 to 2008.

In his spare time, Jason is an avid amateur chef and food writer, where his work reviewing New Jersey restaurants has appeared in The New York Times. He is also the founder of the popular food web site eGullet and blogs about restaurants and cooking at OffTheBroiler.com.

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RE: BlackBerry OS 7: How to Osborne your smartphone sales
FAULKNE 13th Oct
Good day to confirm this comment I would appreciate T h e b e s t o f Z D N e t d e l i v e r e d your website very nice to everyone Yes, Oracle is the only one with shared-disk architecture, but that is there advantage. It means you can add or remove nodes and the database lives on. In a shared nothing architecture, if you lose a node, you lose the system. I'm sure Oracle appreciates EMC highlighting their advantage.I also desire to signal in your RSS feeds. Thank you as soon as once again and maintain up the great operate Awesome post! Thank you very much || thanks for nice content this is really benefit to me.
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Yea, but that's not any different than knowing that Apple will announce its iPhone 5 come late june. We don't see a drop off (or large drop off) of customers waiting for the latest and greatest.

It's may and the phone ships in June, not sure if the Osborne effect in play
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Contributr
@salman_paracha Yeah but there is one CRITICAL difference here. Apple has a very long support cycle. iPad 1 and iPad 2 are both going to get "OS 5" and so will iPhone 4.

As to the Osborne Effect, we'll see if it's in play or not. They've basically said OS 7 won't be available on current handsets, and QNX is replacing OS 7. Who the hell is going to want to buy a BlackBerry and commit themselves to a 2-year contract NOW?
@jperlow

I've also read a couple of reports that iOS 5 is currently being tested on the 3GS.

Interesting article and worthwhile insights.
@jperlow As long as QNX will be an over -the-air upgrade on the BB9900... I don't see the issue. The current BB hardware is not upgradable due to lack of touch screens, powerful processors and separate GPUs... however it looks like they have the hardware ready in advance of the software for once...so maybe you get an improved OS7 for a year and then the upgrade to QNX for year 2.

Although, I am a Sprint Premier customer, and even with the changes I am still one who will get an every 12 month upgrade. Therefore, bring it on. Just put these things on all carriers. Selling the Torch to only ATT or the Storm to only Verizon is the reason they don't sell as well as the curve and bold. They need to release on all carriers all at once.
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Contributr
@condelirios As long as QNX will be an over -the-air upgrade on the BB9900

I wouldn't believe anything Lazaridis or Balsillie says regarding OS 7 to QNX upgrades at this juncture. I fully expect them to screw every one of their customers with OS 7 handsets just as they did with the Torch and other BlackBerry OS 6 and OS 5 smartphones.
@salman_paracha Actually, you do. IPhone sales always drop in the first and second quarters, because everyone knows the new iPhone comes out in June (ok, they MAY delay it this year, but that has been the pattern). Apple got a boost this year by waiting well into 1Q2011 for the Verizon iPhone, but even that hasn't been on fire, sales wise. And that's even without any specs for iPhone 5, or any reason to believe there will be any compatibility problems with the iPhone 4 and new versions of iOS during its useful life.
Who cares? Cellphones have an extremely short half-life, and everyone expects to toss their 2 year old phones into the recycling bin anyway. I don't know anybody who "upgrades their O/S". They just get tossed into the dumpster. Not even close to an "Osborne effect"!
@JJJoseph

"Cellphones have an extremely short half-life, and everyone expects to toss their 2 year old phones into the recycling bin anyway."

Many older handsets are sold on eBay and the like or passed-on to other members in the family. They retain their useful life for far in excess of the 2 years of their contract life.
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Might be true for YOU,
davebarnes 3rd May 2011
@JJJoseph
but lots of people upgrade their phone software. Almost every iPhone owner does. And, this upgrading allows people to keep their "obsolete" phones longer. It also allows old phones to be given as hand-me-downs.
chokeholds on the product line, selling them as loss leaders to get you in a contract. The iPhone broke that chokehold, and the short half-life. AT&T still sells the 3GS, a phone that is two years old.
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History repeat itself!
xTalk 2nd May 2011
Yes, Always!

I couldn't find the logic behind OS 6.1 (aka OS 7.0) release. RIM should concentrate more on QNX rather than reengineering a legacy OS. Market will ignore OS 7. No apps will be targeted for OS 7 or 9900.

Btw, where is Java API for QNX and PB? Don't point me to Android, please!
This analysis is funny....for phone manufacturers like Nokia who didn't upgrade and eventually decided to shake hands with MS have been written off. And Companies like RIM who are working hard to give better experiences to their customers with each passing year are being Osborned!! So let me ask this.
Has Nokia stopped selling E71 or E72 or has iphone stopped selling their 3G phones or for that matter is Samsung still not promoting Wave series inspite of BADA platform not having seen much success..

Look at the brighter side, every year you get a new technology to put your hands on. I am certainly not complaining and willing to trade off my Bold 9700 with the newly launched series.

Just an avid bb user :o)
@contactmannoj I think you miss the meaning of "the Osbourne Effect". Osbourne didn't stop selling the Osborne-1; customers believed in the better models, and decided to wait. Or buy a Kaypro.

Nokia is still selling their SymbianOS phones, Linux phones too. But they have told the market that these are dead-end products, and come 2012 its Windows phone all the way down. Sure, there may be some users who grab these as their last chance. But let's wait and see Nokia's fortune this year. They have been losing about 10% of the smarphone market per year.. they might well lose the rest in a quarter or two. And will developers keep supporting SymbianOS, knowing its demise is certain.

RIM has much the same problems, only, you can at least get a Playbook today and see or develop for their intended future. And they have the advantage of lock in among some businesss user. RIM sold more smartphones than Apple last year, but these Ready! Fire! Aim! Product announcements are not the way you keep that market.
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Same for Nokia!
intenet 3rd May 2011
Except for that Nokia announced WP7 which is a non-seller on all other brands already, while Symbian had stable sales figures.
At least, future blackberry phones are compatible with the current models, while there Nokia WP7 phones cannot use the Ovi-store nor any previously bought software.
Nokia is really "Osborning" their company, not Rim!!
@intenet

The difference between Nokia and RIM is the fact that RIM doesn't have any foothold in the value to dirt cheap segment of the market where Nokia still holds a substantial share. What they have been suffering is in the premium segment where they are losing customers to Apple, Android etc.

They also had a long-long time to fix Symbian, which none in the company before Elop seemed to be able to do. N8 still is a pain to use, Symbian 3 still looks like a phone with touch interface slapped on it. They needed a new OS so bad.
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ZDNet has an answer to your question, Jason.
kenosha77a Updated - 3rd May 2011
Re: "...Who the hell is going to want to buy a BlackBerry and commit themselves to a 2-year contract NOW?"

Well, Matthew Miller's April 22nd Blog: "BlackBerry PlayBook; a good reason to buy a BlackBerry smartphone", seems to give an answer to that question.

I really wish the PlayBook was a "stand alone" tablet and not tethered to a BlackBerry smartphone. (For RIM's sake)

It seems to me that any mention of the PlayBook's battery duration between charges should include the time between battery charges for it's companion BlackBerry smartphone since both must be turned on at the same time to utilize the full benefits of the PlayBook tablet.

For better or for worse, those two products are joined at the hip. And, your article almost seems to imply the rational to forgo a PlayBook purchase until the companion QNX enabled BlackBerry smartphone begins shipping. At least, if I wanted to lock myself into the BlackBerry ecosystem, that's the path I would choose.

So, if that rational is followed by others, the "Balsillie Blunder" effects the sales of future PlayBook units as well.
@kenosha7777
Nothing says that the BB 9900 won't be able to tether to the PlayBook. In that case new sales of older devices are still in jeopardy.
@kenosha7777: The tethered Playbook is much easier for the IT dept to deal with. Only one account and one connection. It's easier for the user, too, for the same reason. RIM is being really intelligent about this.
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RIM's Vista?
sagec 3rd May 2011
The way they've abandoned OS 6 users, makes it feel like RIM's "Vista Moment"...
@jacec ...not a fair coparison at all
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Innovation and evolution of technology is a daily occurrence. It happens with all manufacturers. If there wasn't a daily evolution of something better then I would still be trying to type this from my apple 2e. Everyone that buys, sells or owns gadgets knows the life expectancy isn't high. Retailers take this into account when purchasing inventory.
Mr. Perlow, you may want to educate yourself a little before completely discredit your employer. This is a good start: http://www.pbs.org/cringely/pulpit/2005/pulpit_20050616_000856.html
@jodontnojack

I found the 2005 Robert Cringely article that you cited interesting for his views, at the time, of the Intel-Apple "merger" as he portrayed the Apple announcement that Intel chips would power the next generation of Apple computers. I guess 'ole Robert didn't think too highly about Apple's chances to remain an independent company.
@kenosha7777

But Apple has a long tradition for continued support of old models. Consequently, my old G4/867 Quicksilver purchased 2001 runs OS Classic as well as Leopard. But not Snow Leopard which demands a an Intel processor.
@perronne

I agree. And, I still have my G5 iMac sitting on my second desktop working just fine under Leopard. The old gal comes in handy when my young nieces and nephews come over to visit.
Commodore did something very similar with its Amiga line back in the late 80s and early 90s. Despite their technical innovation, a series of marketing blunders like this by the company leadership drove them out of business, just like Osborne.
That, coupled with the Mephistophelean pact RIM just signed with the boys at Redmond adds more weight to the argument to buy a new Android device. My Blackberry has served me well, just as my Amiga 1000 did, but I see the handwriting on the wall. Alas, poor RIM, we hardly knew ye...
But the 9900 is only available on T-Mobile. Wait...AT&T is buying T-Mobile...nevermind. wink
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Contributr
@Mike.Motes The Verizon version is the 9930.
Is not that bad, osbornes costs a fortune back then. Blackberrys are way cheaper than even iPhones. I think most people with current blackberrys is at a cross roads deciding on which next cellphone to get. People likes new experiences, so RIM is presenting one, not next year, but next month. Probably a good bet by Basille Blunder and Lapse that it is what people are thinking.
If you are in IT and support BBs or other phones, you buy based on need RIGHT NOW. You are not thinking like a consumer that you will wait for the next big thing. You have immediate needs, and they are based on business requirements not how cool it will look, or how new and shiny the OS is. Since the majority of BBs are sold in the corporate arena, I don't think that this strategy from Rim will be that impactful. BTW, my first computer was an Osborne. Oh the memories...
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And even if they do the current blackberries can be made for around $100 so who cares if they liquidate them at 49 or 99 dollars with a contract? Why should Osbournes effect be a problem? (These aren't stupid businessman at RIM)
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Business lesson never learned
tkejlboom 3rd May 2011
If only business studied Osborne rather than spout nonsense about it. Did anyone consider that Osborne's mistake was that it never had a clear roadmap before? That suddenly announcing a radical departure from the product you haven't shipped yet only makes you sound more inconsistent. I submit that the problem wasn't telling the truth too early but that they lied or at least misrepresented their support outlook too late! MBAs are a blight upon the world. They know 7 is terminal and if the continue to release just because of the sunk costs of development, they should only strive to achieve offsetting fixed costs, not raking it in.
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Message has been deleted.
Richard1111 Updated - 3rd May 2011
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you must be old....i had an Osborne with the little bitty yellow screen and was waiting the upgrade...saved my butt in the Navy before the Navy knew about computers.
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Contributr
@cjjohnson01 Not that old. Just a student of history happy
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Odd coincidence that Osborne would come up just a few days after I finally recycled my Osborne 1 and Osborne Executive. I don't recall the "Vixen" ever coming to market, nor had I seen "Osborne" as a verb until this article. I think the term coined at the time was "vaporware," used to describe both hardware and software announced prematurely, or hardware and software that was announced but never made it to market.
The straw that broke this Camel's back.

I notice that no one has mentioned the fact that all new Google Apps are now designed mainly for the iPhone & Android phones RIM is dying fast!
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Here we go again....
johnmckay 3rd May 2011
Constant knocking and criticism. "Its my understanding" = my guess is as good as yours... and who cares whats out 'next year'. Get with it... Phones are disposable items and the features changes so fast that 1 year isn't of any concern. Thats like saying dont buy a new PC as Intel have a new processor in the pipeline. It isn't an argument.

I like my Blackberry but I've long said they need to get a grip. The biggest problem for me is the different platforms, spec etc. Just deliver a model, like the iphone, and let the show go on. Nobody likes too much choice and the risk youmiss a feature you really wanted. I'm happy with the Torch it does what I want and my iphone and ipad are in a drawer.

BUT, for the sake of all others.... RIM... get a grip on reality; cut the model line and start building on a platform that grows with time. You are simply scaring folk away and handing business to the competition.

To be fair I think they were aught with their pants down a year or so ago and are still catcjing up. That said a line should have been drawn and lessons learned. Touchscreen 99 etc aren't my idea of progression as the biggest issue is the screen size. No matter what you do to it the internet experience is RUBBISH... and I like RIM. What nust haters describe it as???

The 9800 Torch is the way forward in my oppinion. Drop the other junk and move on!
Not even close to an Osborne i'm afraid, as much as you'd like to draw the parallel. Blackberry has a huge deployed business base, and business users don't give 2 hoots about upgrading their OS. In fact they usually can't, as it's closely controlled by their corporate IT dept. I'd go as far to say that 90% of Blackberry users wouldn't even know what version of RIM's OS is installed on their phone right now. I don't think this announcement will make even a slight dent in RIM's bottom line.
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Contributr
@juzdownunder "and business users don't give 2 hoots about upgrading their OS."

Yeah? And consumers with BIS as opposed to BES?

RIM's market share is a composite of business and consumers. They lose the consumer space they burn.

A lot of "business users" are conforming with enterprise "bring your own device" models also. I think those people do care.
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When walmart receives a large shipment of bb devices we will know Eol is near. walmart is where all inventory goes to be liquidated.
It does seem weird to put out an operating system that is limited to a window in time. Not able to use old applications and not being able to be upgraded, when its replacement is only a year away. Of, course if you have IT workers who are trying to push the limits of the old hardware (smartphone platform) it may be an exercise worth exploring.
I am a huge bb fan. They were lazy and late in the last 2 product cycles. BB aren't selling sex. They are selling productivity. I don't want to watch netflix on my phone. I want the calendar to sync with outlook and all of my email and calendar functions to be reconciled. They do need to build in a portable hotspot function because that is cool. I have it currently have it on my TMO G2 and it rocks. What doesn't effing rock about my g2 is that I have to share all of my information with GMAIL and google. Really google and facebook via android. You need all of my contacts. All of them. You need to know which ones i email, sms, mms, and which ones i talk to when i am sending a message. The google thing is a little over the top. Are you listening to me google and that vanilla android non htc sync thing blows. No outlook integration without exchange. I am sorry small business no exchange server. I mean really google all of my contacts.

BB has the calendar function. Calendar invites boo yeah!
Email that works and doesn't crash like K9 three times per day.

My super hot awesome smart phone "A collaboration between, google the linux and free software foundation, i guess microsoft( now that they got a sweet patent portfolio in that loan to Novell nice black hearted play Microsoft) Oracle sql lite is the business and your patent portfolio rocks, Apple oh yeah your legal department is the bomb and trolling all of that left over nokia at Fox conn is working for you and HTC damn fine hardware. The Tmobile G2 rocks! It is not a weapon for business. It is a shiny toy to listen to pandora and share my deepest thoughts and desires with google and facebook. The amount of stolen and freemarketed ip in android is awesome but it is not commercial grade yet. Black Berries are. I was drawn away by this shiny metal bauble.

I was fooled and google can suck it and stop tracking my location already and targeting your ads on my voice and location. I mean it is already creepy.

I am going back to blackberry. I need something to work and hold a freaking charge!

Take that perlow!
Jason,

Nokia has done the same thing now that they announced that it will take !!2 years!! for them to come out with a windows phone. I wonder if they enjoy languishing in the zone of low sales.
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