RIM is facing tough times - but it's not all bad, bad, bad in Waterloo...
RIM is facing tough questions over whether it can survive in an increasingly cut-throat mobile market, dominated by Apple and Android. The BlackBerry maker may be down but it's not yet out of the mobile game altogether. silicon.com's Natasha Lomas looks at 10 reasons why RIM can still turn its fortunes around.
1. Security, security, security
Focusing on security and enterprise device management may not be sexy, but it does give RIM something of an edge among business mobile users - in particular those in security-conscious areas such as the public sector, for whom having top-notch security and granular device-management policies remains essential.
For these users, an Apple iPhone or similar is likely to remain forbidden fruit for the foreseeable future - with the BlackBerry there to fill the gap.
"In the enterprise segment, Android, iPhone and Windows Phone 7 all have tremendous flaws today," said independent telecoms analyst Ian Fogg. "Everything's still to play for. RIM has still got a tremendous opportunity in the enterprise space for highly secure smartphone devices. Because, when I look at the other three platforms in the market, security is not any of their core propositions - it's very much an afterthought.
"The iPhone only has one form factor design. It has growing but still evolving security and enterprise management support.
"WP7 has been positioned since the launch primarily as a consumer operating system. Microsoft will extend and improve dramatically enterprise support but it wasn't their priority for the initial launch so RIM still has an advantage over WP7 there.
"Android is the most open platform but it's also the most open platform for security risks," Fogg added. "So again, I think RIM has a security advantage over Android there today."
The BlackBerry brand is still a draw for some mobile usersPhoto: Dushaun
2. The BlackBerry brand
The BlackBerry brand may seem rather tarnished of late but nevertheless that cluster of seven spots remains a powerful draw for gadget buyers.
And while RIM's share of the US market may be on the slide, according to Roberta Cozza, principal analyst at Gartner, the brand cachet still has legs in emerging markets, where access to apps is less important.
"One of the biggest assets is still the...
...brand," she said. "They are having some success in emerging markets where applications don't matter that much but people are driven by the brand and the status associated with the BlackBerry and the BlackBerry Messenger mainly."
It's this new group of mobile users that might help offset some of the losses at the top end. "In the emerging market they should be able to do well for the remainder of the year but unfortunately in the advanced market where applications matter I see them continuing to be very challenged," she added.
It's a touch-centric mobile world but Qwerty lovers can still rely on RIM to deliver keysPhoto: Luca Viscardi
3. The last bastion of the physical keyboard
Buttons may have been all but banished from the touchscreen world but there are still mobile users who like nothing more than running their fingers over lettered squares of plastic.
The smartphone market is awash with touch-centric iPhone clones, giving Qwerty lovers relatively few options to get their fix - which is where RIM comes in.
The vast majority of current-generation BlackBerrys still have keys, catering to RIM's Qwerty-loving loyal fans.
"If I had to look at Qwerty devices in the market they are definitely one of the best - if not the best," noted Gartner's Cozza.
4. QNX - a solid next-gen platform upon which to build
RIM needs to write the next chapter in its mobile story, by transitioning its smartphones to a next-generation mobile platform. It's a task that's going to require a big upheaval in the coming months. However, the good news for RIM is that it has the technology foundation upon which to build, having acquired the QNX OS last year.
And it's a solid foundation, according to analysts. "As a piece of software it's very sound," said Ovum analyst Tony Cripps. "RIM clearly has a contingency plan in place to try and address [the problem of shorter mobile OS lifespans in a more competitive marketplace] through its acquisition of QNX."
"The core technology they have there is very competent," Fogg added.
In addition to grabbing QNX, the Canadian company has been on something of a shopping spree in recent years. "They've made a lot of investments recently on acquiring companies to improve their situation," Gartner's Cozza told silicon.com. "Many, many acquisitions. This is why I say I think they will try and make a solid effort to turn things around."
5. The PlayBook means a new smartphone OS is that little bit closer
Some might criticise RIM's urgency in making a tablet to compete with Apple's iPad, saying the rush to build a slate has distracted the BlackBerry maker from...
...the main business of overhauling its mobile platform. But having done the work designing a tablet with an all-new user interface, RIM is in a better position to design its new smartphone OS.
"A lot of the software effort they're putting into the tablet I'm sure will be reusable for a smartphone design as well," said Fogg. "If you look at parallels in the past, the iPad has a tremendous amount of technology shared with the iPhone. The fact that Apple built the iPhone first made the iPad easier, so the fact that BlackBerry has built the PlayBook will make future BlackBerry smartphones easier too.
"There are precedents with Apple, and going right the way back to Psion, where people have built mobile software platforms for one size of device and that's given them a tremendous springboard into the other."
The existence of the PlayBook also means RIM will eventually have a single OS across multiple device types, and that's a strategic advantage in today's mobile market.
"The good point is that they will have a single platform going across all their portfolio from the tablet to the smartphone which is really a requirement today because the user will want to have a single unified experience," said Gartner's Cozza.
The decline of Nokia's Symbian platform means BlackBerry-shaped gaps are opening upPhoto: Natasha Lomas/silicon.com
6. The lower end vacuum
Competition in the mobile market is extremely fierce these days but the war is not being waged equally on all fronts.
While the high end of the market is largely a squabble between Apple and Android, there are some gaps opening up in the middle to low end of the portfolio.
Here, RIM has more to offer with its wide range of lower cost smartphones. It also has an opportunity to grab a bigger slice of the pie, not least because of the spectacular decline of Nokia's Symbian OS. "In some emerging regions I think they will be able to in
the short term profit from some gaps in the market - in the mid-tier smartphone segment - that Symbian will leave," said Cozza.
"It's pretty clear that RIM are still compelling in some segments," added Fogg. "Most notably in the cheaper smartphone segments they are the main competitive play against cheap Android smartphones.
"At the moment, Apple is not...
...in those price points, Microsoft WP7 devices are far too expensive and Nokia Symbian devices are not competitive with smartphones so RIM is still very competitive in that cheaper smartphone segment.
"In the short term - 12 to 18 months - I think they still have a tremendous opportunity at the low-end smartphone market, the cheap consumer smartphones."
7. The mobile operators need BlackBerry - to keep Android from owning them
Software companies are a big worry for the mobile operators, since they've come up with clever ways to circumvent operator cash cows such as SMS and voice.
And the biggest worry of them all? Google, of course - creator of the Android mobile platform. Having this software giant owning all their mobile customers gives the operators the cold sweats, and gives them an incentive to give RIM a leg-up.
"Operators like to have the choice. They don't want Android to be a dominant platform in the market and they are using RIM's BlackBerry devices, notably the Curve range, as a way of offering an alternative to Android smartphones at cheaper price points, so there are areas in the market where RIM is still very competitive," notes Fogg.
8. The stickiness of BBM
BlackBerry Messenger, or BBM to its army of loyal users, is RIM's secret to stemming customer churn.
BBM: Giving BlackBerry users a reason to stick around since before the iPhone was bornImage: RIM
"BBM is one of the reasons why in some of the emerging markets people go with the BlackBerry, because of this instant message capability," Gartner's Cozza said.
BBM is an instant-messaging program for BlackBerry smartphones. It's IM just for BlackBerry-to-BlackBerry messaging, hence the stickiness - you can't BBM your mates if they own Android phones or iPhones.
RIM reckons BBM has worked viral wonders by turning BlackBerry users into brand pimps who push BlackBerrys on their mates so they can chat to them in the privacy of an invite-only encrypted messaging service.
However, as successful as BBM has been in getting kids hooked on BlackBerry, the messaging service is under attack from rivals who are cooking up their own systems. This is one USP that RIM can't necessarily count on to do the hard sell on its behalf for too much longer.
9. There's still time for RIM to turn things around
Among the analysts, the consensus is RIM does still have time to overhaul its products in its bid to be a next-generation mobile contender.
"Nokia is a much better example of a company that certainly did wait too long as regards its device platform strategy for the high end," said Ovum's Cripps. "And in a sense it really found itself backed into a corner where it really needed to do something. I don't think RIM is quite in that [corner] but it looks like it's not going to have the best of years.
"RIM is at the end of the development life cycle with the old platform. It's had some difficult decisions to make [but] it seems to be making those decisions. Right now I have a lot of confidence that they will turn it around."
While other mobile makers have already rebooted their mobile strategy, including Palm - now part of HP - and Microsoft, RIM could afford to...
...leave it later since its platform was more competitive than either Window Mobile or Palm OS Classic, reckons Fogg. "They had a better starting point," he said.
Gartner's Cozza added: "I think they can [turn it around] but it is becoming very difficult. They have now, with QNX, a more solid foundation for future products. I just hope this is not too late."
10. They've survived - and thrived - this long, and you can't say the same for the mullet...
RIM was founded in 1984, the year mullets and ripped sweatshirts were considered cutting-edge fashion. Times - and hairstyles - have changed yet RIM is still with us. And the company is still making loadsamoney, albeit not quite as much as it used to.
"They are a very sound business and they've done remarkably well coming out of being effectively a two-way pager company, originally," said Ovum's Cripps. "They've maintained momentum in the smartphone industry and in the handset industry generally that I don't think anyone would have expected they were going to be able to."
"If you start looking into the numbers and shipments and so on it's hardly a disaster for RIM," he added. "They've been experiencing steady growth. For many years, you could argue, it's been spectacular growth."
"Although the future is high risk for RIM, in many core markets of theirs today they are still very competitive," agreed Fogg.
"Based on its past record, I think right now you would have to give it the benefit of the doubt and suggest that it can stage a reasonable comeback," Ovum's Cripps added. "2011 is not going to be a year they're going to remember all that fondly but I think we should show them a more confident face than perhaps we do."
Gartner's Cozza concluded: "If we look at our forecast for RIM, we still have them as being the fourth player by 2015. I wouldn't write them off to be honest but it's going to be a very challenging year. They are not the only one in this situation but they really need to execute more quickly. I hope they are learning from what they are seeing and feel the pressure."