Can BlackBerry survive? Well, the woods are still full of bear poo
BES and BBM, QED: Not RIP IMO
Analysis BlackBerry brought its top bosses to Europe this week for its annual Jam developer event on the continent. With the launch of the new BlackBerry OS 10, and its Z10 and Q10 smartphones, now behind it, this is a good time to look at company's realistic prospects.
I think the Canadian tech giant still holds a few aces, but before reviewing these positives, a sobering recap of its position is in order.
I'll start with the challenges:
1. It isn't mandatory any more
BlackBerry’s uniqueness - its end-to-end secure messaging - gained it armies of enterprise users in governments, the public sector, and companies large and small. The good news is that it is hard for these organisations to reverse their decision to use BlackBerry.
However, the BlackBerry Enterprise Server software - required and installed in those aforementioned office environments - is no longer unique in its field. Corporates peering at Blackberry OS 10 are told that if you haven’t got BlackBerry servers, don’t worry. ActiveSync has won the push email battle, and BlackBerry competes around it on management controls, its own social network (aka BlackBerry Messenger) and to a lesser extent application deployment. I can’t see the public sector and government customers moving terribly quickly.
2. The middle-class has fled
Ordinary punters using TCOKARIM*'s handsets are either on prepay deals or low-value monthly contracts, or they're in emerging markets. The "middle-class" smartphone user willing to shell out at least £30 a month on a smartphone probably moved away three years ago. At long last, with BlackBerry OS 10, the company is in a position to win them back - imaging and music are up to par with the competition, for instance.
Which leaves what, exactly, is the BlackBerry differentiator? BBM, presumably. And questions remain whether the attractive new operating system (which seems to require 2GB of RAM) can meet the low-earning punters half way. It is possible to carve out margins in ferociously competitive emerging markets - we've seen Nokia do a terrific job in Asia - but nothing yet announced by TCOKARIM satisfies that segment, yet. We need to see low-cost up-to-date 'Berries soon.
3. Apps, apps, and apps
BB OS 10 is a brand-new platform playing in a market where phones are chosen on the availability of lifestyle apps. I hear anecdotally that the largest reason cited for returns on Windows Phone is the lack of applications in the Windows Store. At launch, BlackBerry promised a list of well-known names, including the Kindle e-book viewer and voice-chat tool Skype, being ported to the new platform. But Windows Phone can boast Skype and Kindle apps too - and NetFlix - and that evidently isn't enough to move the needle. Facebook's gateway drug - the duopoly has Instagram - is still a deal-breaker.
4. We're still live guinea pigs for BlackBerry OS 10
BB10 today doesn’t boost productivity for power users. It needs to be tweaked for them so they can easily switch between tasks.
5. BIS bashed, boshed?
The new strategy makes BlackBerry Internet Service - which neatly routes encrypted email and other mobile data through BlackBerry's systems - optional, and this may cause uncertainty and confusion that BlackBerry really doesn't need. The plus side is that you don't need a BlackBerry-provisioned SIM to enjoy using a BlackBerry phone with BBM: any carrier's mobile-data-enabled SIM will do.
But this means that those upgrading to the new Z10 and Q10 phones (the first handsets powered by BlackBerry OS 10) are now swimming in the same shark-infested waters as everyone else. For example, will mobile networks count your BBM traffic as part of your 3G or 4G data usage?
This remains to be seen, and operators who are rooting for BlackBerry as a third platform will have to step up and help here with attractive bundles and clear assurances. This is a price conscious bit of the market - they don't want nasty surprises.
Lest we forget, there are some advantages. In the rush to bury RIM, pundits have often overlooked these:
1. Destiny is in BlackBerry's hands
BlackBerry owns its own platform. This is the single biggest drawback for stock-market short sellers, but it's also a tremendous advantage. The company can produce rapid iterations of the software - as fast as the carriers can clear them. It can be responsive to requests and make tweaks. (BBOS 7 is a testament to this - full of useful usability features). Nokia, for example, can only make requests and hope the memo doesn't get lost in the Microsoft bureaucracy.
(I'm oversimplifying, integration work between Microsoft and its partners is close, but the notoriously dogmatic Metro team do like to take things at their own sweet pace - the Me hub has been unchanged since launch.)
2. It’s got customers - lots of them
If you want to make a BlackBerry executive's teeth grind, just mention "the battle for the third ecosystem". BlackBerry is comfortably in third place already, with 80m active punters and 60m addicted to BBM. There are 8m in the UK alone. It’s much easier for a company to sell into an existing customer base (and former users who may still retain some affection for the brand) than get an entirely new and unknown platform airborne - as Microsoft is finding out. The users wait for the apps and the developers wait for the users.
3. Multi-device promiscuity
Here's a market development that hasn't received much attention. Amazon's entry into the tablet market and the general acceptance of carrying multiple devices changes things quite subtly. It's not unusual to see someone with an iPad Mini, iPhone and monochrome Kindle reader - mmm, I know - or an Android, a BlackBerry and an iPad. What changes is the rationale of a purchasing decision.
The "second mobile screen" allows people to remain part of the Apple app ecosystem and choose as a phone, an alternative based on criteria they hold dear. The smartphone no longer has to do it all - it can be smaller, or more specialised - around one unique selling point. Some might choose a great camera - or perhaps BBM. This must give Nokia and RIM, who currently have just 10 per cent of the smartphone market, some hope.
I can't quite believe Steve Jobs would ever have sanctioned the release of the iPad Mini: from an aesthetics point of view it's a mess, it's underpowered, and it cannibalises sales of Apple's higher margin fondleslabs. But the cat's out of the bag, now.
4. BlackBerry's developer relations team are outstanding
No one tries harder with developers than BlackBerry. Its developer effort is not just coherent, but backed with graft and attention. By contrast, Apple leaves its commandments at the top of the mountain, and developers have to climb up to the top to read them.
This is not quite a throwback to the Gassee era, when it was Cupertino policy that developers should write for Apple purely out of love, but there isn't anything like the level of intimacy and interaction with Apple, Google or Microsoft. If you have a problem, someone will try and fix it.
5. BES is still a huge asset
Inertia helps. BlackBerry's Enterprise Server is still a mighty asset for a company that wishes to sell lots of client devices. BBM is used at least six times a week by 80 per cent of its enterprise users, BlackBerry claims. Nobody is going to be able to manage the existing client base better than TCOKARIM*, no matter how many BYOD Droids and iPhones walk into the building every day.
BES is still a strong enterprise asset for in-house applications: it delivers notifications, and comes with its own secure tunnel. Of course, if TCOKARIM* gets its new pricing wrong (it's moving to a per-client access fee), it could nullify this asset.
6. BB10 is bright and good
In my First Take last week, I focussed on the many rough edges of the new platform, some of which are quite inexplicable. After a bumpy launch, in which the UK appears to be the world's beta tester, BlackBerry needs to get a bugfix release out urgently. But the gotchas - such as the inability to swipe through successive messages rapidly, or the drunken rotation from landscape to portrait - are relatively easy to fix.
BlackBerry is a very responsive company, and it's able to make such changes quickly, unlike manufacturers who are reliant on a third party. I'm surprised how rapidly the BB10 gestures become so natural, you curse their absence on other devices. (I particularly like the task-switching, which is best on the market). BB10 already offers excellent video recording, and possibly the best browser on a smartphone.
Great software is often written by small teams - and BB10 has the feel of a small team of clever developers and designers doing something a bit special, of trying really hard to be imaginative. This is great to see.
7. BBM, BBM, BBM
Only the smarter analysts seem to fully appreciate the value of BlackBerry Messenger, the social-network-in-hardware with 60m users. As I wrote here in 2010, before it achieved its riotous notoriety, BBM is the richest social network in the world, allowing the spontaneous creation of ad hoc groups, and authentication web companies can only dream about.
All in all, it's probably the best UX anyone in mobile has come up with: a communications gateway to the entire "experience". BlackBerry has chosen to bundle BBM exclusively with its own hardware, which means it's the only licensee of BBM, but gains a $150 margin for each user. But what if it had 600m instead of 60m, at $15 per license? Or a billion?
If you can envisage companies like Sky using BBM embedded into their delivery systems to drive engagement, then a billion users doesn't seem so far fetched. BBM really is the greatest and most underrated technology asset in the world today.
So there are worse place to be than BlackBerry HQ today. Declaring success or failure at this stage is a tad premature. ®
*The Company Once Known as RIM. Readers boggling at the statement above "it's not unusual to see someone with an iPad Mini, iPhone and monochrome Kindle reader - mmm, I know - or an Android, a BlackBerry and an iPad" should bear in mind that in the circles frequented by Andrew it is quite true. - Ed
Sponsored: Network DDoS protection