TORONTO-Research in Motion (RIM) of Waterloo, Ontario, a small Canadian company far from Silicon Valley, has developed some of the hottest wireless technology in the world. In just a short time, RIM has transformed itself into a market leader in technically advanced interactive pagers that can be used to send or receive e-mail, access stock quotes, personalize Web content and synchronize office calendars.
Two-way paging and wireless e-mail are going to be two killer applications in the new millennium. “In the next few years, there’s going to be a phenomenal growth in e-mail and messaging that will hugely expand the current market of more than 50 million pagers in North America. Once you put in the Internet, your interactive pager becomes your command central and wearable viewer to information,” said Mark Guibert, marketing manager for RIM.
In the last 18 months, RIM has signed its share of major deals. BellSouth introduced RIM’s Inter@ctive Pager 950 over its Mobitex wireless network for the United States in September 1998. Rogers Cantel then followed suit a few months later with the company’s two-way paging service for Canada, and agreements have been struck with American Mobile and SkyTel for messaging over the ARDIS wireless network.
For fiscal 1999, RIM, with shares traded on Nasdaq, had sales of CND$70.5 million (US$47.9 million) and earnings of CND$9.5 million (US$6.4 million).
Two new contracts have the potential to push RIM even further into the big leagues. In August, RCN Corp. inked a deal to distribute RIM’s BlackBerry wireless e-mail technology to its subscriber base of more than 500,000 users. The agreement lets RCN Internet customers be the first in the United States to send and receive e-mail through their existing accounts. The initial order of the interactive device will generate more than CDN$10 million (US$6.8 million) in revenue over the next 12 to 16 months, said Guibert.
As well, Venezuela-based carrier Telcel, owned 78-percent by BellSouth, signed a CDN$1.8 million (US$1.23 million) contract to supply RIM’s 950e wireless pagers over its Mobitex network. While the size of the contract may be relatively small, it’s significant because Telcel is the first wireless operator outside North America to buy the company’s technology. Other nations might hop onboard too.
Company history
RIM was originally founded in 1984 by President Mike Lazaridis, an electrical engineer who was a recent graduate of nearby University of Waterloo. The wireless focus on the Mobitex protocol began in earnest in 1989.
“We’re not the first company where it takes more than 10 years to be an overnight success,” said Guibert. He claims RIM has the largest development team in the business, with 150 to 200 engineers working on Mobitex and DataTAC products. Gigantic Motorola, with its PageWriter 2000X two-way pagers, may dwarf RIM in revenue. But Guibert says in research and development of strictly wireless data products, Motorola trails his company.
RIM’s major offerings-the Inter@ctive Pager and the BlackBerry e-mail device-are virtually identical. Each is palm-sized (8.89 centimeters wide, 6.35 centimeters long and 2.36 centimeters thick), wearable on a belt and weighs less than 140 grams. The power source is a single AA battery that lasts for weeks, even if the unit is left on continuously. Despite the compact size, the RIM machines are powered by an Intel 386-based chip and come with two megabytes of flash memory. The QWERTY keyboard is surprisingly good, with a small track wheel for scrolling through lists.
The BlackBerry device markets for CDN$399 (US$270) with a flat rate for national U.S. coverage at CDN$39.99 (US$27) per month. The Inter@ctive Pager, meanwhile, costs about CDN$359 (US$243) with airtime fees starting at about CDN$25 (US$17) per month.
The company’s products are popular with road warriors who need to be reached at any time. “On the road, I use Outlook (personal information manager) synchronization with my RIM,” said Simon Witts, general manager for Microsoft Canada. “Obviously, the benefit is that e-mail is live the whole time when you’re out of the office, and you can synchronize schedules and tasks when you dock.”
RIM has received rave reviews from the likes of Witts’ boss, Microsoft’s Bill Gates, as well as America Online’s Steve Case and Dell Computer’s Michael Dell.
Robert Blumenthal, vice president of product development for Clearnet Communications, a PCS carrier in Canada, is somewhat more guarded about RIM’s prospects. “Two-way messaging applications to date have not been supported well by any technology outside of RIM’s, and the company has carved out a very nice niche. But we soon will see alternate technologies deliver the same messaging capabilities, even from your wireless phone,” he predicted.
Still, Guibert is optimistic about the road ahead. “The Inter@ctive Pager is the No. 1 wireless trading device, and we see tremendous growth opportunities,” he said.
In the United States, Fidelity Investments, a 10-percent shareholder in RIM, offers the pager to clients who use it to get quotes or buy and sell funds. The United States’ largest discount and Internet brokerage, Charles Schwab Corp., plans to offer wireless trading by year-end using several platforms, including RIM’s.
On the horizon, RIM sees its devices becoming consumer items. Subscribers would use the pagers to receive information about sports scores, breaking news, weather reports, and the gargantuan application of them all-wireless e-mail.
