RIM: BlackBerry competition is 'overstated'

Rivalry from the likes of Nokia and Motorola is "way overstated", says top company official from BlackBerry maker, Research in Motion (RIM).

Analyst house IDC noted in a statement last month that while RIM is the undisputed market leader in the enterprise space, the vendor now faces the challenge of defending its position as other vendors emulate its offerings.

RIM, however, remains unfazed.

"I think those are statements of speculation," Don Morrison, COO of RIM told ZDNet Asia. "We don't have 100 percent of the market, but on a carrier or market basis, we have roughly 65 to 75 percent of the market." The executive was in Singapore Tuesday for the launch of the company's new customer support operations center.

Morrison said: "While questions about competition are fair, I don't think we're arrogant. We're just continuing to do what we do with the carriers and customers."

According to preliminary financial results for the second quarter of fiscal 2007, ended Sep. 2 this year, RIM's total revenue reached US$658.5 million--up 34.4 percent over the same period last year.

"[Analysts] were quite surprised over how much we grew over the summer, which is usually a quiet period for the industry… We grew above their expectations," Morrison said, adding that the company's subscriber base is now approximately 6.2 million worldwide.

Still, IDC believes Nokia and Motorola are in strong positions because of their leadership in the overall mobile phone market. This foothold will give them influence, as well as key positions within the value chains, to challenge RIM.

For example, IDC said, the Motorola Q and Nokia E61 are high-profile devices intended to generate buzz and resonate with business users on both a functional and personal level.

Morrison, however, rebutted: "First of all, those devices look like BlackBerry devices.

"The point is, as the industry matures, the business is more about the back-office software system as it is about the devices," he said.

He explained that RIM's platform allows businesses to easily support SAP or Siebel applications on BlackBerry devices. Competing products, he said, would require these organizations to develop "tailored solutions that are not secure and take months [to complete], at a high degree of expense".

Morrison said: "We're not particularly concerned about the handsets, because the customers who buy BlackBerry are becoming sophisticated about their expectations. The handset is only one part of it."

IDC argues that choosing Microsoft as a key platform partner gives device vendors such as Motorola, HTC, Samsung and Palm, the ability to grab at least some of the core BlackBerry user base.

The analyst said in its statement: "Microsoft is ramping up IT policy support and is seeking to exploit its dominant position in the IT systems of enterprises worldwide, as well as with end-users familiar with the Windows OS and Microsoft applications." IDC further noted that Windows Mobile-supported devices will see the fastest growth in the global handheld market, contributing 32.3 percent of the total market share by 2010.

Fighting to stay a leader
According to Morrison, RIM is spending a lot of time on the ground to ensure it stays on top of the pack.

"We're constantly listening to the marketplace and we bring that back with a very strong research and development team," he said. "I think as long as you are giving the market the latest technology and moving at a pace where customers will adopt the technology, you'll stay a leader."

The company is also eyeing new markets to ensure it holds onto its throne.

In May this year, RIM unveiled plans to penetrate the Chinese market through China's largest mobile operator, China Mobile.

Katie Lee, public relations manager at RIM Asia-Pacific, said roaming customers in China can now use their BlackBerry devices on China Mobile's network. She told ZDNet Asia that most of these customers are multinational companies that have existing BlackBerry devices.

"We are now working with the Chinese government and China Mobile to bring our handsets into China," Lee said.

However, analyst Gartner said in a research note that RIM would have to ramp up its efforts considerably, such as by working with national distributors and provincial carriers, to penetrate the Chinese market.

The analyst noted that China Mobile, which is expected to sell BlackBerry products directly to business in future, largely has a consumer-oriented marketing and sales force that lacks enterprise expertise.

According to Morrison, RIM is only working with one operator in the Chinese market, for now. "The business model that we are working on with China Mobile is still under development," he said, noting that his company currently has its own service team in China to support China Mobile. "[But] the carrier may decide [in future] to provide the support service themselves or look for another party to do it."

Gartner noted that RIM faces strong competition in China from several vendors, including Nokia, which already leads the Chinese mobile device market with a market share of more than 30 percent. China is also largely a consumer-oriented mobile services market, the analyst said, and many enterprises have little experience in supporting wireless applications and may be slow in adopting such tools.

Morrison said: "I don't know if the markets [RIM's competitors are] going after is the same as what we're going after. We're very much focused on the enterprise and government sectors.

"The value proposition that BlackBerry provides may be different from what Nokia is doing in the country right now," he added. "I don't think we're going into the market thinking that we will be head-on competing with anybody."