The mobility market is arguably the fastest-growing and most competitive in the IT industry today – yet one of the biggest pillars of that market, Research In Motion, are struggling.
While some smartphone vendors such as Apple and Samsung continue to grow revenue and increase their market footprint, others find themselves struggling to stay in the game. And some solution providers say RIM may soon find themselves in this less fortunate second category if the Ontario-based BlackBerry maker doesn’t make some changes – and quickly.
Statistics published by mobile market analyst ComScore show that as of October, Google’s Android OS accounted for 46.3 percent of the smartphone market share, while Apple claimed the runner-up spot with 28.1 percent. RIM followed next with 17.2 percent of the share. Unlike its competitors, though, RIM’s hold on the market has slipped rapidly compared to the 21.7 percent it held only three months earlier in July.
RIM declined to comment on its recent shift in the smartphone market; solution providers, however, have attributed the BlackBerry vendor’s shrinking market share to a variety of causes. The first is simple, but perhaps the most difficult for RIM to overcome: a lack of innovation in an industry that is racing non-stop toward the "latest and greatest."
Tim Shea, CEO of managed service provider Alpha NetSolutions, feels that the evolution of BlackBerry smartphones pales in comparison to that of other smartphones – most notably, the iPhone. "If you just look at a typical BlackBerry phone, it’s really hard to tell a new one from one from five years ago. The form factor is the same," Shea told CRN. "From my perspective, they’re just not keeping up."
Shea noted that, while a bigger screen or a virtual keyboard could give RIM a much-needed boost, it still may not be enough to compete with the likes of Apple and Google. With the iPhone 4S touting never-before-seen features such as Siri, an "intelligent assistant" application you can literally talk to, it’s safe to say that the innovation bar has been raised pretty high. In the mobility market, it seems catching up isn’t enough – you have be there first.
What’s more, as smartphones become even "smarter," end-user expectations have risen. Bill Lucchini, COO of on-site services marketplace OnForce told CRN that he’s seen a shift in the smartphone market as more and more users expect their phones to meet both professional and personal needs.
"I think a lot more people – especially the field services guys – are thinking about their phone as their office," Lucchini said. "That’s a key trend, as people’s minds shift from it [the smartphone] being a more and more capable device, to it being a replacement for my other devices. That fundamentally changes the market."
As a result, a device like RIM’s BlackBerry – which has been equated almost exclusively with the corporate world since its launch in 1999 – may leave some users wanting more.
RIM’s lack of an application ecosystem may also be contributing to its declining market share, solution providers speculate. As iOS and Android developers continue the rapid introduction of apps into their respective app stores, it’s unclear whether BlackBerry developers are following suit.
"It seems like the two success models are both an ecosystem and a hardware device. I just want to know where BlackBerry’s ecosystem is," said Lucchini. "It doesn’t mean there isn’t another success model out there. Lots of people launch devices. I just don’t see a way from them [RIM] to be successful without something more than a device."
RIM rocked by BlackBerry outages
RIM recently announced it will be launching a new operating system – BlackBerry 10 – but few details have been released about its potential to build up an app ecosystem. According to RIM, the new OS will enable developers to write native applications and will feature HTML 5 support as well as the expected robust security.
Even with those things, though, BlackBerry 10 may not be enough to breathe new life into the brand. According to Shea, a new operating system won’t necessarily attract new BlackBerry developers – or even encourage existing ones to stay faithful to the BlackBerry name.
"You have to put yourself in the shoes of a developer," Shea said. "How much market share do they [RIM] have now? How much energy am I going to spend learning a new OS? If I’m not already a BlackBerry developer why would I get into? And even if I am already a BlackBerry developer, if it’s a big change, do I really want to move forward with it? There’s nothing I’ve heard from BlackBerry that would make me feel like this would be a good bet."
App ecosystems and innovation aside, the massive BlackBerry outage in October didn’t necessarily help RIM’s cause either, Lucchini noted.
Starting on October 10, BlackBerry users in Europe, the Middle East and Africa experienced service disruptions on their BlackBerry smartphones that prevented the sending and receiving of e-mail and other messages. Two days later, the BlackBerry blackout made its way to the U.S., Canada and Latin America.
Needless to say, affected BlackBerry users weren’t thrilled. In late October, RIM faced a pair of class action lawsuits, filed in Quebec, Canada and Santa Ana, California, spurred by the inconvenienced smartphone users who, in some cases, lost service up to four days. The outage, according to Lucchini, may have been the final straw, prompting many RIM customers to throw in the towel.
"BlackBerry had a major multi-day outage. And I think they [RIM] were, at that point, under fire," Lucchini explained. "Everybody was saying, 'You can look at iOS, you can look at Apple and you can look at Android, and they have touch interfaces, they have app ecosystems, and app stores, where I can do so much more. I love my BlackBerry and I’m so loyal but it doesn’t have those things. The browser on the BlackBerry isn’t that good, so I feel like all these devices are better than mine.' And then you go and have an outage."
While the outage may have added yet another blemish to RIM’s smartphone reputation, there is still hope for the BlackBerry brand, solutions providers said. Since its introduction to the market, BlackBerry has positioned itself as one of the most secure corporate devices an enterprise could get its hands on, and if RIM can find a way to really emphasise this strength, they could regain a lot of the market share they’ve lost.
"From my perspective, having to maintain a fleet of iPhones or even Droids right now – they are all little islands," Shea explained. "With a BlackBerry, with the enterprise server, I’ve got the ability to profile the devices. I can issue commands to the devices from a central console. There is nothing like that for the iPhone or for the Droid right now. And that is the one glimmer of hope I see for BlackBerry. If they can catch up on the feature set and the ease-of-use and still have that central administration and central control, then they might be able to get the IT guys back."
RIM makes nice with Android, iOS
RIM may have found at least one way to shake things up and make its BlackBerry brand more compelling these days, thanks to the release of its new BlackBerry Mobile Fusion solution.
This mobile device management solution is intended to help IT teams administer the variety of mobile devices pouring into the corporate world by enabling them to monitor them all through a single Web-based console. What’s most interesting about RIM’s new solution, though, is that it not only supports BlackBerry smartphones and tablets -- it supports devices running on iOS and Android, as well.
Steven Kantorowitz, President of New York-based BlackBerry service provider and systems integrator CelPro Associates views the multi-device support model seen with the new BlackBerry Mobile Fusion product as a step in the right direction for RIM, as it marks the first time a BlackBerry enterprise server will be able to support non-RIM devices. More importantly, though, the solution shows that RIM is cognisant of its competitors seeping further and further into the corporate world.
"They are acknowledging that they aren’t controlling the whole market," Kantorowitz said of RIM. And, he continued, if the company stays on this security-focused path, its downward turn in the market could quickly turn around. "Even more than the 'cool' factor, security is number one in the enterprise. They need to make this their biggest emphasis."
Despite all the hype surrounding Apple and Android, many RIM service providers are rooting for the enterprise smartphone maker and hope to see it reclaim its share of the market. Without competition, Shea noted, Apple and Google may simply get too comfortable (just as RIM may have had a few years ago), and lose their bright-eyed eagerness to innovate. What’s more, a lack of competition means fewer options for end users, and could ultimately drive up smartphone prices.
"If it just comes down to Apple and Google it's sad because what will happen now is that they will get fat and happy and stop innovating. A lack of competition means a lack of price pressure. Look at the monopoly Microsoft has had for the last 25 years," Shea told CRN. "They are finally starting to feel threatened by one competitor and they’re in a complete panic. But how much better is it for the rest of us that we have choice, and that there are new technologies that come from that competition and new pricing that comes from that competition?"
While RIM declined to comment for this story, the company is still presenting an optimistic and even defiant message to the public. Upon announcing its Q3 quarterly earnings of US$265 million – which are down drastically year over year from the US$911 million it reported in Q3 of 2010 – RIM expressed its determination to stay in the mobility game.
"We are certainly not satisfied with the situation in the US market," said RIM co-CEO Jim Balsillie. "So we are absolutely planning a comprehensive set of marketing, advertisement, and promotional plans. And you are going to see that happen imminently."