Earlier today, we talked about how RIM, the company behind Blackberry phones, once contemplated switching to android. Instead, the company has chosen to stick to its gun and move forward with its upcoming operating system: Blackberry 10 (BB10). Was this decision right, or was it a tragic mistake?
There are plenty of people who would immediately reply: “yes, it was a tragic mistake!”, but the answer isn’t as obvious as one may think. While using Android removes the “OS problem”, it may also mean jumping from the pan into the fire for RIM.
A glorious past
As you know, Blackberry phones have been spectacularly successful for almost a decade, thanks to their tiny keyboards which are the key to higher productivity in text-based applications like email and SMS. It adds enough value that many professionals are still paying for two phones (and subscription) to get the best of both worlds (a BB phone and another big-screen smartphone). In reality, Blackberry phones are great at text communications, but don’t shine for pretty much anything else.
Users have changed the way they use smartphones
Unfortunately, even text productivity is not compelling enough for Blackberry phones to remain competitive in a very tough market. The usage pattern has changed: instead of typing actual email replies, a lot of users now send something like : “yep, will reply soon” and draft a reply on their computer. This could obviously be automated, so a few taps were good enough. Instead of answering emails from smartphones, people simply curate them.
Switch to Android – Not really a “duh”
Most people would agree with the previous paragraphs, so wasn’t switching to Android an obvious choice? Android would make the Blackberry phones compatible with a wealth of apps and games. RIM would also be relieved from the burden of developing the OS, and could therefore put its focus into building phones and managing its network (BIS or Blackberry Internet Service).
On the surface, this seems like a great idea. However blackberry’s problems were many-fold. First, the keyboard layout that make Blackberry phones great requires a screen size that is not touch-friendly (too small). If people want to buy large screen phones, the advantage that gave RIM an edge for a decade would not help it here. To date, no such design has been successful on the Android platform, not even the one Facebook-friendly HTC Chacha.
Secondly, RIM’s business model is based on the higher premium that it charges to access the BIS network and the BES (Blackberry Enterprise Server) license. Although RIM claims that both are more secure, many enterprises don’t think that it is worth the extra money. That’s why the penetration of the iPhone and Android devices in the workplace has been going up. In short, the security features from competitors are “good enough” and less expensive to manage. This is a big problem for RIM.
In the end, RIM was much more than “just” a handset maker. Its business model made it a network provider as well with BIS (Blackberry Internet Service) and BES (Blackberry Enterprise Server). This allowed the company to thrive and generate good margins for a long time, which made it a huge player in the wireless eco-system.
Unfortunately, the non-handset related strengths also hid grave issues like the outdated Blackberry OS, APIs and SDKs, and gave little incentive for RIM to really tackle the OS issue before the big troubles showed up. Ultimately , the Blackberry OS code base was not salvageable (given the allotted time) and RIM decided to start “fresh” with the blackberry 10 OS, which is based on the work done by QNX.
If RIM was to jump on the Android wagon and compete mostly on the strength of its handsets, it amounts to betting the farm that it could produce smartphones strong enough to go against Apple, Samsung and HTC based on their design/specs. It is unlikely the case. Instead, the company is trying to tweak its existing business model – that’s not easy either, but RIM has decided that it was the best path for survival.
What do you think?