What’s Next for Enterprise Icon?
RIM Shows Promise -- and Strain -- at BlackBerry World
May 13, 2011 (Vol. 32, No. 16)
If RIM is on its last legs – as many in the industry seem to assume – there was little sign of it at BlackBerry World.
RIM’s annual industry gala, formerly known as Wireless Enterprise Symposium, was held recently in Orlando. RIM seized the opportunity to showcase its strengths, launch a bevy of new products, and privately acknowledge some weaknesses.
While the company has been shaken by the upswing in competition from Apple’s iOS and the various implementations of Android (that shot past RIM in market share last year), the BlackBerry is still a mainstay in both the enterprise and consumer markets; most people don’t realize that 60% to 70% of BlackBerry’s sales are to consumers.
RIM still has 17,500 employees worldwide and is supported by 550 carriers in 170 countries, and traffic on its BlackBerry Messenger service increased 332% from last year.
RIM Facing its Waterloo?
Yet RIM’s management knows they are facing problems – big problems. The stock tumbled more than 13% to $49.16 the previous Friday, putting it below the $50 mark for the first time in six months. In a testament to the impact of Android, Motorola gained almost 8% to $25.80 the same day.
The keynotes by co-CEOs Jim Balsillie and Mike Lazaridis were decidedly upbeat, but in private conversations RIM execs openly discussed the challenges they are facing.
They do appear to be somewhat frustrated by the assumption that the company has one foot in the grave, while they see the business expanding in many regions of the world, including many markets in which Apple doesn’t even compete.
However, while RIM management focuses a lot on the strength and quality of the product line, that message clearly isn’t resonating in the market.
RIM’s Bold New Moves
As might be expected, there were several announcements, though two in particular stood out.
The first was a successor to the high-end Bold 9700 and 9630 dubbed the Bold 9900 (there is also a 9930 for CDMA networks); those devices will ship this summer with the next-generation BlackBerry 7.0 operating system.
There were a number of units to play with, highlighting the slightly wider, thinner and lighter design. The wider body allows for a bigger keyboard, which is a definite plus. The form factor is similar to the Bold (i.e., display over keyboard), but the display is now a touch screen. To navigate you can use the keyboard (no on-screen typing), touchpad and “screen flicking.”
The device features 8 gigabytes of memory (plus a microSD slot for as much as 32 additional gigabytes) and runs a 1.2-GHz processor, which delivers a very good response with pinch, stretch and all of the other touch screen gymnastics. It also has all of the expected bells and whistles including an accelerometer, digital compass and proximity sensor.
One very important addition is support for Near-Field Communications (NFC), which could be used for mobile payments or a variety of other applications. BlackBerry reps demonstrated how an NFC tag on a product display could be read and then connect the device to a Web page with product information, schedules, availability, coupons or anything else.
The device is a little light on the connectivity side, opting for the “diluted” definitions of 4G, HSPA+ in GSM environments and EVDO Rev A in the CDMA world. This is somewhat surprising given RIM’s focus on leading-edge hardware, so the smart money would have bet on LTE and possibly WiMAX (for Sprint). But it looks like that will have to wait for the “next” product refresh.
RIM did touch all the bases on Wi-Fi, however, with 802.11a, b, g and n, and the 802.11n interface can operate in either the 2.4-GHz and 5-GHz bands. The iPhone 4 is 802.11b, g and n – with n in 2.4 GHz only (i.e., useless for corporate deployments).
RIM was a little fuzzy on plans for its software direction. The current Bolds run on the BlackBerry 5 operating system (now upgradeable to BlackBerry 6), the Torch touch-screen models run on BlackBerry 6, the new Bold 9900/9930 will run on BlackBerry 7 and the PlayBook tablet runs on QNX, the operating system RIM acquired last year.
BlackBerry 7 will be the last version of the current BlackBerry operating system, and at some undefined point in the future, both the smartphones and tablets will converge on a new operating system derived from QNX called tentatively “Next Generation BlackBerry,” said CTO for Software David Yach in his presentation on Capital Markets Day. Given the importance of software and applications, we will be watching those developments closely.
BES, Meet ubitexx
The more surprising announcement was RIM’s acquisition of Munich-based mobile device management (MDM) company ubitexx GmbH. More surprising than the acquisition was the fact that the ubitexx will be integrated with the BlackBerry Enterprise Server (BES) and will provide support for Apple iOS and Android-based devices.
Given RIM’s legacy of focusing all its efforts on supporting the BlackBerry platform to the detriment of all others, this is a major change of direction and a clear indication that the company recognizes it is not the only player in the enterprise smartphone market. It also puts RIM in competition with the other MDM vendors (and RIM partners), like AirWatch, Sybase, MobileIron and Zenprise.
Why RIM went after ubitexx rather than one of the more established players is somewhat of a mystery. The company currently has approximately 125 employees, according to ubitexx CEO Markus Mueller.
In the configuration the company has developed, the ubitexx server will run in parallel to the BES. Most common management functions for BlackBerry and non-BlackBerry devices will be managed through “a single pane of glass” using a shared interface called “Fuse,” but it will route BlackBerry management messages to the BES and non-BlackBerry requests to the ubitexx server.
The product line will be brought under the BlackBerry Enterprise Software group and, according to Pete Devenyi who heads up that group, pricing for the new product is still in development. However, both Devenyi and Mueller were clear that the initial management capabilities for non-BlackBerry devices would not be on par with what they do with a BES, though they would be as good or better than what other MDM vendors can do.
PlayBook Hits Snags
There was also a lot of talk about the PlayBook, though it is clearly still a work in progress. The hardware and basic performance is great, but the software is way behind.
Also, RIM is wrestling with a major problem with the BlackBerry Bridge. The PlayBook does not support a direct cellular data interface, but rather gets access to e-mail, calendar, and PIM functions on a BlackBerry smartphone through a secure Bluetooth interface RIM called BlackBerry Bridge.
However, AT&T, one of RIM’s biggest carrier partners in the U.S., has refused to allow BlackBerry Bridge on BlackBerry devices on its network.
“We have just received the app for testing, and before it’s made available to AT&T customers we want to ensure it delivers a quality experience,” AT&T says in a comment to Wired magazine.
By all reports AT&T received the software when every other operator did. The commonly held belief is that AT&T is simply trying to decide if it can squeeze a few more bucks per month out of its BlackBerry customers.
Down But Not Out
All told, there’s a lot going on in the BlackBerry space, and to paraphrase Mark Twain, the reports of RIM’s demise are greatly exaggerated.
RIM is a company in trouble but it is serious about coming to grips with that and remaining a major force in the smartphone market. It is too early to tell if RIM will be able to reverse the tide, but it’s important to remember that the U.S. represents only 15% of the worldwide market for cell phones and 21% of the worldwide smartphone market. RIM is playing in the “big game.” 
Michael Finneran is an independent consultant, industry analyst, and writer who focuses on wireless technologies, mobile UC, and fixed-mobile convergence. He wrote the book “Voice Over Wireless LANs - The Complete Guide” (Elsevier, 2008), though his expertise spans the full range of wireless technologies including Wi-Fi, Cellular, WiMAX, and RFID. Contact Michael at mfinneran@dbrnassociates.com. | 
