In 2005, Canadian wireless company Research in Motion (RIM) came from relative obscurity to steal a global lead in e-mail equipped mobile devices with its BlackBerry. Could 2008 be the year that BlackBerry falls off its perch?
The executive ranks fell head over heels for the device -- their addiction to always-on e-mail leading many to dub the gadget the "crackberry".
Every year since, at least one analyst group has claimed that RIM was in danger of being dethroned as vendor after vendor released their own cellular PDA. But three years on, RIM remains unmoved at number one.
According to research group Gartner, RIM came out of the third quarter of 2007 with a 29 percent market share of cellular PDA's, with its nearest competitor HTC trailing on 18.4 percent.
The BlackBerry isn't getting any less popular either -- with sales growing at some 87 percent over the last quarter. But its competitors, most of which use Windows Mobile OS, are picking up the pace. Second place HTC was growing at 367 percent, and fourth place Samsung at 764 percent -- both, albeit, from a very small base.
When it comes to mobile e-mail, nobody has done it as well as RIM.
Robin Simpson, Gartner
If the growth rates of these two companies were to continue, it's not unfeasible that the BlackBerry could lose its number one spot in the enterprise before the year is out.
"When it comes to mobile e-mail, nobody has done it as well as RIM," said Gartner research director Robin Simpson. "But they could well be knocked over if somebody gets it right."
Secrets to success
According to RIM, the success of BlackBerry in the corporate market comes down to several key factors. One, its long-standing commitment to security, two the reliability of the service (both the operating system, server system and carrier infrastructure), and third the smarts of the device itself -- its ruggedness, long battery life, and simple graphical user interface.
"Part of the success of the BlackBerry is its simplicity," said Simpson. "Even though the device has some multimedia features, it does what it is designed to do very simply. The biggest need within its target market is constant communications -- things like e-mail and calendaring. It just happens to do those in a very simple way, in a way that is undemanding in terms of bandwidth, and deeply integrated into the popular Exchange and Lotus e-mail and calendaring platforms."
Indeed, RIM's CEO has been quoted saying that it is what has been excluded from the device that makes it so successful. For C-level execs in particular, an easy graphical user interface is essential.
While these elements helped propel the company into a leadership position, Simpson asserts that RIM only stayed there because it fixed the one piece of the puzzle that had been missing in its early days.
"The thing that has allowed BlackBerry to continue its success, the thing nobody expected them to do, was to get the industrial design right," he said. "They have realised that there is a fashion preference in the purchasing decision, and an image that goes with it. The device basically needs to look cool."
"At the end of the day, everybody is a consumer," Simpson said. "The way a consumer decides on a technology is very different to how a corporate IT department does. A very big factor is -- does it look good? People who use it are consumers and the successful device will meet personal needs as well as business needs."
Simpson says that RIM's Pearl and Curve models forced the industry to sit up and take notice: RIM knew how to make its devices sexy, not just functional. In his mind, the future of the corporate gadget will need both.
As a mobile platform, Simpson judges Microsoft's Windows Mobile to be in many ways superior to RIM -- at least in terms of how well it integrates with the desktop computing experience and allows for open development of applications.
But equally, he says, the market for a "desktop experience on the phone" is nowhere near as big as the market for simple push e-mail, the one thing that BlackBerry does so well.
An awful lot of people who have a BlackBerry never use any other application but e-mail.
Robin Simpson, Gartner
"An awful lot of people who have a BlackBerry never use any other application but e-mail," he said.
While at a functional parity, Microsoft's partners have historically failed to produce anything of note in terms of design. The one company that has come closest to getting the design right, Simpson says, is HTC -- which could, perhaps, explain the company's phenomenal growth rates.
HTC has an interesting pedigree. It was founded as an OEM manufacturer of PDA's for Compaq (the iPAQ in 2000), struck similar deals with the likes of i-mate, O2, Dopod and HP, before going it alone and releasing new models under its own brand.
Reviews of the HTC Touch tend to compare it favourably both to enterprise-level devices and consumer devices with large touchscreens, such as Apple's iPhone.
But whether HTC is a BlackBerry-killer, or simply a better alternative for those that want complete Windows integration, remains to be seen. HTC must first succeed i-Mate as the largest provider of Windows Mobile devices in Australia. I-Mate has key relationships with all the major carriers in the country -- but what its devices have in functionality they sometimes lack in consumer cool.
HTC and Samsung both feature push e-mail and long battery life, two features oft raised by BlackBerry fans as arguments to choose RIM over a Windows-based device. Samsung's "Blackjack" model also includes one feature that RIM only very recently introduced -- 3G connectivity.
Palm, which led the original pen-based PDA craze, remains in the game with capable products and plans to launch a PDA equipped for Telstra's Next G network. The company will, however, have to shake off concerns about the health of its business before it can be taken seriously as a RIM competitor.
Enter The MID
At this year's Consumer Electronics Show in January, much noise was made of the Mobile Internet Device -- an Intel-promoted ultra-mobile PC prototype that blurs the functionality of a laptop and a PDA.
Intel CEO Paul Otellini claims that such a device, still under development, will become the platform of choice for developing personalised Internet applications.
Simpson isn't convinced. While he is impressed with the improved battery life and MHz performance of Intel's chips, he thinks the chip company has the form factor wrong.
"I am sceptical about the mobile Internet device," he said. "There have been many attempts to come up with a device that weighs less than a kilogram but has the functionality of a laptop. At Gartner, we call it the one kilogram wasteland."
"The MID is primarily useful as an input device," he continued. "It is about taking a Windows desktop experience down to a small device. But is that the way people want to interact on a mobile? I don't think so. You don't tend to input much at all in terms of word processing or spreadsheets and the like when you are standing up. You sit down. And if you are sitting down, then an ultra-light laptop will still be a better option."
Paul Osmond, regional director for RIM, says the company doesn't see the MID form factor as any kind of threat to the BlackBerry.
"Anything that makes you stop doing what you are doing isn't ideal. There shouldn't be a reason to keep walking and talking and doing what you are doing," said Osmond.
It's for this reason -- pure mobility -- that Simpson does expects the crackberry-killer to not necessarily come from devices aimed squarely at the corporate market but from those moving into the corporate world from the hands of consumers.
"The interesting new things in the enterprise have all come from the consumer device world -- and the consumer world is driven primarily by mobile phones," he said. "Smartphones are going ahead in leaps and bounds. They are designing ways to get things done on a small screen. The innovation will be around the user interface."
There is no better example, of course, than the much-hyped Apple iPhone.
Built for the consumer market, the iPhone comes with a bundle of applications focused on user-generated content and context-aware computing. The real innovation behind the iPhone is its unique user interface -- a mix of touchscreen and motion sensor technologies.
Simpson says what Apple is doing right, and what Google is planning to do next with its planned open source phone, is winning the hearts of the "pro-sumer" -- the professional that buys a device for its consumer appeal, but later finds it practical for business use.
"GPS and location-based services, that's a hint of where the next killer device might come from," Simpson says. "It won't be designed for corporate use, but consumer use. Companies that make a device relevant and useful to consumers will win."
Appealing as it is, it won't necessarily be the iPhone either -- but any number of devices that boast sleek design, touchscreens, long battery life and an open platform for application development. It has already been suggested, for example, that the iPhone is too expensive to roll out across the enterprise.
The BlackBerry killer might just as easily come from a traditional mobile handset manufacturer. Depending on your definition of what constitutes a smartphone, the subject of some debate, it might well be a Nokia or a Motorola that knocks RIM off its perch.
Include the smartphone (many of which have some form of e-mail functionality) in the same pool of sales data as the cellular PDA, and you start getting a different picture altogether. Nokia holds 48.7 percent of the market compared to RIM's 10 percent.
Considering its familiar user interface, Nokia may yet come up with a BlackBerry-killer. Nokia's strategy, one it has pursued very successfully to date, is to attack the market just below the executives and their expensive BlackBerry's, releasing devices with both consumer features and basic business smarts.
"It's all about the ecosystem"
Osmond expects that IT administrators won't have a bar of it.
"The BlackBerry itself is just a device -- but everything that goes with it is what makes it valuable," he said. "The amount of effort we make in the backend systems, in the three support centres around the globe providing 24 hour support, is phenomenal. RIM makes it all look so straightforward, and that gives a lot of comfort to the [corporate customer]. That's something we are yet to see from anyone else in the industry."
He strongly disagrees with the assertion that the next big corporate gadget will come from the consumer world.
"Consumers may well be pushing for better features, but in the enterprise space it's all about control," he said. "Administrators don't care about features or how the device looks, they care about control."
"The iPhone is good as a consumer device," he said. "But whether Apple and its third party partners are willing to put the effort in to make it a workable corporate tool remains to be seen. It certainly isn't today."