In 2005, Canadian wireless company RIM emerged from relative obscurity to steal a global lead in email-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 when it was released — their addiction to always-on email leading many to dub the gadget the "CrackBerry".
Every year since, at least one analyst group 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 in this field.
According to research group Gartner, RIM came out of the third quarter of 2007 with a 29 percent market share of cellular PDAs, 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 the Windows Mobile operating system, are picking up pace. Second-place HTC was growing at 367 percent, and fourth-place Samsung at 764 percent — both, albeit, growing from a very small base.
If the growth rates of these two companies were to continue, it would not be unfeasible for the BlackBerry to lose its number-one spot in the enterprise before the year is out.
"When it comes to mobile email, 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 of success
According to RIM, the success of BlackBerry in the corporate market comes down to several key factors: firstly, a long-standing commitment to security; secondly, the reliability of the service (both the operating system, server system and carrier infrastructure); and, thirdly, the features 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 email 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 email and calendaring platforms."
Indeed, RIM's chief executive has been quoted as saying that it is what has been excluded from the device that makes it so successful. For C-level executives in particular, an easy graphical user interface is essential.
While these elements have helped propel the company into a leadership position, Simpson asserted that RIM has 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," Simpson 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 corporate gadget of the future will need both qualities.
As a mobile platform, Simpson judged 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, Simpson said, the market for a "desktop experience on the phone" is nowhere near as big as the market for simple push email, the one thing that BlackBerry does so well.
"An awful lot of people who have a BlackBerry never use any other application but email," Simpson said.
While of 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 said, is HTC — which could explain the company's phenomenal growth rates.
HTC has an interesting pedigree. It was founded as an OEM manufacturer of PDAs for Compaq (with the iPAQ in 2000) and 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 it remains to be seen whether HTC devices are a "BlackBerry killer" or simply a better alternative for those that want complete Windows integration.
HTC and Samsung devices both feature push email and a long battery life, two features often raised by BlackBerry fans as reasons to choose RIM offerings over Windows-based devices. Samsung's BlackJack model also includes one feature that RIM is yet to introduce — 3G connectivity.
Palm, which led the original pen-based PDA craze, remains in the game with capable products. 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 about the "mobile internet device" (MID) — an Intel-promoted, ultramobile PC prototype that blurs the functionality of a laptop and a PDA.
Intel chief executive Paul Otellini claimed that such a device, still under development, will become the platform of choice for developing personalised internet applications.
Simpson wasn't convinced. While he was impressed with the…
…improved battery life and MHz performance of Intel's chips, he said he believes the chipmaker has got the form factor wrong.
"I am sceptical about the mobile internet device," Simpson 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," Simpson 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, said 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 the reason of pure mobility that Simpson said he expects the BlackBerry killer to come not necessarily 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," Simpson 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 in terms of the iPhone is its unique user interface — a mix of touchscreen and motion-sensor technologies.
Simpson said that Apple is finding success by winning the hearts of professionals that buy a device for its consumer appeal, but later find it practical for business use.
"GPS and location-based services — that's a hint of where the next killer device might come from," Simpson said. "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 Motorola device that knocks RIM off the top spot.
If you include the smartphone (many of which have some form of email functionality) in the same pool of sales data as the cellular PDA, you start getting a different picture altogether. Then, 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 devices, releasing products with both consumer and basic business features.
The ecosystem is paramount
Osmond expects that IT administrators won't have a bit of it.
"The BlackBerry itself is just a device — but everything that goes with it is what makes it valuable," Osmond said. "The amount of effort we make in the back-end 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."
Osmond strongly disagreed 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," Osmond said. "Administrators don't care about features or how the device looks; they care about control."
"The iPhone is good as a consumer device," Osmond added, "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."