Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
“We could have had it all …”
From Adele “Rolling In The Deep” (21 Album)
For a while there (before the introduction of the iPhone), it seemed Research In Motion just about had it all. BlackBerry sales were growing worldwide and the devices were so addictive that the public called it “CrackBerry.” I had a BlackBerry at the time and was very bullish on it before the introduction of the iPhone.
But, when Apple introduced the iPhone, their iOS environment and really intuitive user interface, the world of handheld operating systems and user experience changed forever. RIM immediately fell behind. Google’s Android only magnified the difference between the “old way” (BlackBerry) and the “new way” (graphical user interfaces, access to hardware, applications and application stores).
RIM is certainly struggling right now as the company transitions from their Java-based BlackBerry operating system – which is very reliable but “DOS-like” – to BlackBerry 10, the new, modern OS based on QNX that they acquired back in 2010. The future of the company rides on how well they make the transition. While I’m disappointed that CEO Thorsten Heins recently announced a delay in delivering BB 10 to the market, I’m sure customers would rather wait a bit and get a “rock solid” new BlackBerry OS, apps and services than otherwise.
From my perspective, I think that RIM could have saved time and money if they had adopted Android instead of acquiring QNX. Time will tell, of course, but here’s my rationale.
Between 2006 and 2009, RIM had tens of millions of subscribers and was still growing. They said users wanted real keyboards and not on-screen imitations. And, they said that they had the most secure network that would guarantee delivery of every message. They were the king of mobile e-mail and would continue to grow.
I sense that RIM felt during that time they knew more about what it took to make the hardware and software work together. They could see what Apple and Google were doing. They could have licensed Android, but they decided to go down their own path with QNX.
But, my reasoning that RIM should have adopted Android is based on my belief that Android was a better and more efficient way for RIM to offer their BlackBerry value-added services than having to invest in the underlying mobile operating system which would be a diversion to RIM’s main principles. I would explain it this way to RIM:
“Look, you guys have one of the best and most reliable systems for wireless messaging. You’re the corporate standard. Why worry about all the tremendous challenges with building and maintaining an operating system for the smartphone market? Why not leave that to someone else like Google and their Android mobile OS? You can’t license iOS from Apple, but Google is investing tremendous resources into building and maintaining a sophisticated mobile OS for a whole array of smartphones. And, they provide the OS to folks like RIM at no charge. BlackBerry’s value is in the services you provide not the underlying operating system. Using Android will save you tens of millions of dollars in development expense, keep you up-to-date with changes in the market and let you concentrate on providing a great BlackBerry experience to your tens of millions of subscribers.”
Building a mobile operating system is difficult. Look at the investment that Apple, Google and Microsoft have made over the past 20 years. Apple certainly started work on the development of iOS many years before they announced the iPhone in 2007. And, it took a few years for Google with their unlimited resources to get Android to be really good. Microsoft is still working on it, although they are finally making progress.
Well, here we are two years after RIM acquired QNX and the company is still knee-deep in doo-doo trying to adapt QNX to the smartphone market. It’s obviously taking a lot more effort, time and resources then they expected – as evidenced by the recent delay of BB 10, which now won’t be available until next winter. Not a good sign.
I commend Mr. Heins for not pushing BB 10 out before it was ready (like RIM did last fall with the premature announcement of the BlackBerry Playbook that was clearly not ready for prime time). But, what if they have to make another 3-6 month delay next winter? That might cause the company to go on life support.
I’m sitting here in the summer of 2012 and hope that RIM doesn’t live out the same sequence that happened to Palm. Palm and the Treo smartphone was the darling of the early days of smartphones. They “had it all” in smartphones, but the folks at Palm were not able to advance the core OS to keep up with what Apple and Google were doing. Boom! It crashed and died a horrid death even after emergency life support was administered by Hewlett-Packard (or some would say that HP applied a suffocating mask).
I would hate for BlackBerry to suffer the same fate as Palm. There are over 78 million subscribers that rely on BlackBerry to deliver e-mail (and a lot more) to them every day. Conversion to another mobile supplier could be very costly for large enterprises that have invested tens of millions of dollars to deploy BlackBerry devices and maintain their BlackBerry Enterprise Servers.
There’s still the issue of real keyboards on smartphones. RIM has continued to manufacture smartphones with real keyboards although all of the other popular smartphone handsets sold into the consumer market – including Apple, Google and Microsoft – have gone to keyboards embedded in the display, primarily to provide the largest screen possible for showing rich media such a photos and videos.
While a small portion of the 78 million BlackBerry subscribers might still prefer a smartphone with a real keyboard, it seems to me that the overall market has spoken and most smartphones will be “all display.” RIM has said they intend to produce some models with real keyboards within BB 10.
What’s RIM to do at this point? It would be costly and time consuming to admit their strategic mistake and dump QNX for Android. That seems impossible at this point. They are too far in to the conversion to QNX to be able to back away at this late stage. And, it would be difficult for someone to buy them and do much more than simply convert their subscriber base to another platform.
Perhaps Microsoft could acquire RIM and make good use of 78 million subscribers. Microsoft could migrate the BlackBerry device business to Nokia and convert the BlackBerry OS efforts to Windows Phone services. An alternate – but even bolder path – would be for Microsoft to acquire both Nokia and RIM in a move similar to what Google recently did buy acquiring Motorola Mobility for $12 billion. In this case, Microsoft would integrate RIM’s BlackBerry services within Windows Phone and sell BlackBerry as a service. That would be “rather messy” and, therefore, not likely to happen.
It’s just seems like RIM is going through some really tough times – tough for the employees, tough for customers and tough for the industry. I hope there’s a positive outcome. The current situation makes it very challenging for RIM to return to their greatness of years past. Early adopters have already switched and invested time and resources on an alternate platform. Even I have abandoned BlackBerry and purchased an iPhone.
I’m a bit teary eyed over it. I’m rooting for RIM just like I did for Palm a number of years ago. I hope they can pull a rabbit out of a hat and show all of us – customers and analysts and the press – that BlackBerry 10 can wow us with an OS, apps and services that provide a great user experience. I sit with bated breath hoping to be “blown away” by BB 10. We’ll give our analysis of it once it’s been released into the market.
J. Gerry Purdy, Ph.D. is Principal Analyst, Mobile & Wireless at MobileTrax L.L.C. As a nationally recognized industry authority, he focuses on monitoring and analyzing emerging trends, technologies and market behavior in the mobile computing and wireless data communications industry in North America. Dr. Purdy is an “edge of network” analyst looking at devices, applications and services as well as wireless connectivity to those devices.
