Sticky Smartphone

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Why Blackberry is dying and what they should do

Blackberry is dead! Not enough Apps! Actually, part of the reasons for their demise is because changing enterprise and carrier trends caught up with RIM’s previous decisions, so let’s begin by delving into RIMs history

History & Strategic Shift 

RIM focused on enterprise early, originally a 2-way paging device, they created push email and transformed into a smartphone company in 2003 by focusing on push e-mail. This was their first critical decision, they moved from reseller channels and completely relied on carriers to sell and distribute their phones.

Early Advantages

RIM positioned its BlackBerry as a carrier‐friendly platform via its data efficiency. Most of the world had low bandwidth data connectivity and blackberry was dominant with their compression algorithms.

With its smaller bandwidth footprint, it costs enterprises less when there is no all you can eat data plan and carriers save money because they do not need to spend as much money to increase the capacity of their network capacity for this service (see this article for more info - http://www.rysavy.com/Articles/2009_01_27_Rysavy_EMail_Efficiency.pdf)

Then they introduced Blackberry Messenger (BBM) in 2006 an excellent solution for enterprise, it allowed secure messaging for enterprise customers reducing their costs which increased incentive for data packages to be purchased from the carriers. Security and email became synonymous with Blackberry.

Chasing the golden egg

RIM started to chase the consumer market and relied heavily on BBM to attract the youth market. The attraction for this market was reduced SMS costs. RIM got caught up in the consumer smartphone battle losing market share.

What happened?

By spreading themselves out, they lost focus on how the smartphone world changed causing delays in execution.

  • Enterprise is shifting away from owning the mobile device for its employees and allowing employees to us their own phones.
  • BBM as a youth market cannibalizes carrier SMS revenues reducing the incentive for carriers to push blackberries. After Android came along, Verizon didn’t push Blackberries with the same vigor.
  • Apps such as WhatsApp, Line, Talkbox etc. give the youth a ‘newer’ phone with an equivalent low cost messaging system so they can shift away from BBM. Moreover, it’s not locked down to only one manufacturer which means they can ‘free message’ friends using different devices.

What’s next?

The new CEO has stated they will have a consumer focus, particularly at the entry point where people upgrade from feature phones to smartphones. This will be incredibly tough for Blackberry who have to garner more support for the consumer app ecosystem. Smaller development houses do not have the resources to support multiple platforms and they will be selective over which platform to develop for first. Blackberry is not the first on the list.

Part of reasoning for their focus on consumer is because they rely heavily on carriers to sell their devices and the carrier battlefield is currently focused on the consumer rather than the enterprise market. What might exaceberate the problem is that they plough their resources into consumers and end up losing the enterprise customer.

Coming Up

Cloud, multiple devices and security.

These are areas that are becoming increasingly important. For enterprise, the deployment of private cloud solutions, online collaboration and working on the go. For security, the increase in cyber attacks and ‘cyber espionage’ is on the increase, and for the prosumer, carrying multiple devices is a pain. 3 distinct areas that need addressing which RIM can approach.

Here’s what they could try -

  • Expand the scope of their cloud services beyond messaging, email and IT administration. Consider CRM, or 3rd party developer solutions that can wrap around their cloud architecture
  • Wrap up corporate collaborative productivity tools within their ‘secure cloud’. They already have a great reputation for security.
  • Split the blackberry so that it’s both a personal and enterprise tool. If a phone gets stolen, there is extra security for the ‘enterprise’ half of the phone. The prosumer can then install apps etc. onto the ‘consumer’ half of the phone. Many people don’t want to mix their professional contacts with personal friends.
  • Separate billing for different profiles on one device. An extra value service which carriers can benefit from which provides effective cost management for IT departments, and still allows the phone to be used as a personal device.

This tries to address a relevant market for RIM with their blackberry products and targets both the enterprise, prosumer markets with incentives for carriers to continue to push the device. If more data solutions go via blackberries cloud, it provides more incentive for carriers because of RIM’s data efficiency. Even recently, carriers such as Docomo are looking for data efficient solutions

Photo by arrayexception

  1. stickysmartphone posted this