The BlackBerry is in for a bruising
By Scott Moritz
Research in Motion (RIMM) takes the stage this week to preach to a gathering of its faithful in Florida during the Canadian company’s annual Wireless Enterprise Symposium. But just as the BlackBerry maker seems to be reaching the height of success, its flock may well start to stray.
Not only will followers be tempted by new devices like Apple’s (AAPL) forthcoming business-friendly iPhone, other sect members will face excommunication as cost-cutting initiatives sweep through the office ranks.
For now, however, it’s party time for RIM. A few highlights ahead for the week in Orlando include a performance by John Mayer, and even hotter, the unveiling of the company’s first 3G phone, the BlackBerry Bold.
These have been very good times for RIM. European sales have taken off as has the stock, up 81% over the past year, and hovering close to a one year high.
It’s been a good run, but now come a new set of threats.
Due to delays first reported by Fortune, the dazzling BlackBerry Bold will not be available in the United States until as late as August. This means Apple will beat RIM to the market in June with its 3G iPhone.
The hotly anticipated, speedier successor to the original iPhone will also have a deep price cut thanks to a planned subsidy by AT&T (T). The new iPhone is also designed for the sweetspot in smart phones – BlackBerry’s business e-mail niche. Apple says it will license software to allow the iPhone to work with Microsoft’s (MSFT) Exchange platform for office e-mail as well as calendar and contact syncing.
And according to Cisco (CSCO), the iPhone business plan seems to be marching along. On an earnings call with analysts last week, Cisco chief John Chambers said the new iPhone has some of Cisco’s office network security system loaded on. “The upcoming software version 2 for the iPhone incorporates Cisco’s VPN technology,” Chambers said.
Having the networking giant involved with Apple’s business play certainly can’t be comforting to RIM.
Another potentially unsettling development is Nokia’s (NOK) upcoming plan to offer a series of BlackBerry lookalikes through AT&T. The new phones, starting with the E71, will also work with Microsoft Exchange and use a Nokia managed e-mail server, a delivery and security system akin to the BlackBerry approach, says one source familiar with the plan.
BlackBerry fans have seen threats like this before. Good Technology had a popular business e-mail system favored by Palm (PALM) Treo users. Motorola (MOT) acquired Good in 2006, and so far has failed to make much added headway against RIM. If anything, RIM’s one-trick killer-app ability to deliver instant, secure e-mail has been extended beyond professionals to consumers attracted by the sleeker phone designs, GPS navigation, music players and cameras.
On Monday, RIM announced a plan to start a $150 million venture capital fund to spur development of applications on the BlackBerry platform. The move – made along with RBC and Thomson Reuters – is similar to the $100 million venture effort that Kleiner Perkins Caufield & Byers announced in March to develop software for Apple’s iPhone.
A good part of RIM’s success is reflected in the stock’s rise, which has so far defied the slowing economy and sluggish corporate information technology spending. But the new product delay coupled with arrival of Apple and Nokia’s BlackBerry killers, may challenge RIM’s perennial winner status.
To be sure, a lot can be made of BlackBerry’s huge sales opportunities overseas where RIM has a very good chance of repeating the business e-mail success it had in the United States. And some RIM analysts see some big promise in the a crop of new BlackBerries coming out in the coming months.
TD Newcrest analyst Chris Umiastowski points to two phones in the works that should help restart the BlackBerry sales cycle. One is a flip or clamshell styled phone code-named KickStart that will launch with T-Mobile this fall, Umiastowski wrote in a report. And the long awaited touchscreen answer to the iPhone, which is apparently dubbed Storm, is due out in late fall, he notes.
But there is a different sort of storm on the horizon, in the form of spending pressure. It used to be common practice amoung businesses to hand out BlackBerries to an entire staff of go-getters. But the devices are not cheap, about $200 and up, and the monthly service contracts, and revenue sharing payment to RIM are large numbers on the business expense list. Some companies looking to attack costs have targeted the BlackBerry line item.
Here’s one example: Honeywell (HON) has recently taken its belt tightening efforts in a notch and told employees in some units to prepare to turn in their BlackBerries.
Honeywell, an aerospace and electronics giant, isn’t exactly under the gun in terms of immediate economic pressure – the company increased it profits by 22% last quarter on 10% sales growth. The point being, if the strong players are looking for places to cut the fat, one can imagine how the budget police in industries like banking, airlines, autos might be viewing BlackBerries these days.
iphone over blackberry? be serious. iphones are for kids. i think i’ll stick with my nextel blackberry 7520 (for the PTT (push to talk) or “chirp” and my ipod.
RIMM, NEXTEL, HURRY UP!!
SS: The new Apple iPhone 2 will support both HSDPA and UMTS. Which is the same as the Blackberry Bold. The Bold will not be faster then the iPhone 2.
Mobile industry was laughing when Apple announced that they plan to get into mobile handset business. Less then two years later, everybody is trying to develop iPhone killer. I hate to bet but Apple will reshape mobile industry even more (they did that with MP3s in electronic industry). No need to talk about Blackberry back-end, this is the gap Apple can close alone or with partners.
iSmashPhone.com
Iphone has craeted high spectations in Mexico, the exclusive carrier is going to be Telcel which is the bigges carrier in mexico. By the time the Iphone hit mexico
it will include 3G tech along with all the business applications, which will make Blackberry extremely nervous. also we have to take into account that the Iphone is very music-friendly which will make Erricson and Nokia -the most
popular cell phones in mexico- highly
skittish. It’s going to be fight for survival in the phone industry in Mexico with the Iphone’s arrival.
Mr. Moritz, you contradict your headline that the “Blackberry is going to take a bruising” by the words you wrote in the article. Why do you headline one theme yet write another?
I’ve been setting up Blackberries and Treos for a while and the Blackberry really is just a one-trick pony, but it does that trick very well and is easy enough for the average tech-challenge corporate suit to master, and these types of guys don’t change ponies very easily. But the writing is on the wall for RIM in terms of where handheld tech is going. They ought think about investing in a company like ASUS or such for future devices.
In my opinion, the iPhone is and remains mostly a consumer product, notwithstanding 3G, the hype about Cisco and Microsoft Exchange. The Blackberry is and remains mostly a business product, notwithstanding the move toward including more media. There is plenty of room for both products. My needs are for a business product. I want a physical keyboard. I especially want a very efficient mobile email device, not a “little computer”. The functionality for email of the Blackberry is vastly superior to that of the iPhone. One example is the fact that you must delete emails one by one on the iPhone. On the Blackberry, you can scroll down the entire list of emails and by holding the correct key, highlight all of them for deletion with one go. So, while the Blackberry may be “clunkier” than the iPhone for some consumer functions, the iPhone is “clunkier” than the Blackberry for email functions, the raison d’etre of the device and the principal use for businesses.
They will both thrive because they are both at the top of the game for which they are intended and not aimed at the same market, at least for now.
Dear Writer, be better informed. Blackberry has had at least two 3G phones, the Curve and the Pearl, with a company that has decent 3G coverage, Verizon Wireless
I can tell you that my company is ditching the blackberry for the iphone. We tend to lead trends and so I’m betting this may be the beginning of the exodus called for by the author. User friendly, meme, customization, multiple media options is where we finally end the consumer revolution. RIMM’s specificity will outdate her. The trend is not her friend. (and, my personal care is for neither)
Microsoft Windows Mobile will bury RIM, not Apple.
BlackBerry will continue to dominate the business market due to the qwerty keypad. I work for an investment bank, and people that need to type quick will never go for the iPhone touchscreen . No matter what the iPhoniphiles think. For the record I love apple and use an iMac and a MacBook Pro, but I sync a BlackBerry to them, and will be upgrading to the new BB Bold when it is released. For all of those that say that a touchscreen is just as fast as a keypad, then why doesn’t Apple convert all of their keyboards to touchscreen? Exactly, because its not as fast.
If email is your bread-n-butter, BlackBerry is still the only game in town.
Tundra: Next time try reading the article. It wasn’t “Apple over RIM”. . it was Apple, and Nokia, and market realities (sluggish economy vis-a-vis service cost) that the author felt would erode RIM’s share. You’ll get so much more out of these articles if you actually read them.
It looks like a few of us are missing the point.
RIM’s “Bold” phone works on High Speed Downlink Packet Access (HSDPA) which is a 3.5G technology offering download speeds of upto 14.4 Mbit per second.
Ref: http://en.wikipedia.org/wiki/High-Speed_Downlink_Packet_Access
While Apple’s upcoming, much hyped 3G phone uses UMTS, which supports a maximum data rate of 2 Mbps.
Ref: http://en.wikipedia.org/wiki/UMTS#Features
You can easily see that the Bold will be atleast 5 times faster than the iPhones new 3G phone. (even after taking into account more practical data rates after network load, traffic overheads etc.)
Simply stated, you will have to wait 5 times longer to download music/ browse a webpage on the new iPhone. So, I agree that the Bold is not light years ahead of the iPhone, but it is 5 times ahead.
Acknowledge the facts, or else things like the financical sector collapse are likely to happen again.
Too funny! Another article about the next “blackberry killers”. I’ve been reading that story for the last five years and I laugh every time. I imagine we’ll be reading the same story in another five years as well. Meanwhile, RIM stock has increased in value 600% in less than two years. I think it was up $9 today alone. Everyone seems to forget that Apple has actually helped RIM, by focusing so much public attention on Smart Phones. Blackberry sales have skyrocketed since the iPhone came out. Thanks Apple.
It’s funny that all of a sudden, RIM is going to fade away because of the iPhoney. You media types seem to think that Apple has dominate market share in the mobile phone world. The only sector that Apple has dominante share is the mp3 sector. RIM will be fine and so will Apple.
But Blackberry has the corporate market where “they” control and watch what you do on your cellphone/pda via the Blackberry server. Guess what? Most of us IT people here have Apple iphones for our person phone and NOT blackberrys. If we could only change Corporate from Blackberry’s to iPhones….
“This writer needs to look up the Cisco Iphone. Not the same as Apple’s Iphone.”
Just so you know they were not talking about the Cisco iPhone, they were indeed talking about the Apple iPhone when it comes to IPsec VPN technology. Apple has announced this, and so to has John Chambers, I do hope you realize when John Chambers says Apple iPhone, he certainly knows the difference.
An Apple is only good as it looks! As I mentioned before, AT&T mobile service sucks! To many drop calls! Until they offer it on Verizon’s network, I won’t buy it!!
iPhone 2.0 (the software update) is not a rumour, it’s been officially announced by Apple. The update will be released to all iPhones (old and new) around June ‘08 and will add (among other things) a bunch of business-releated features like MS Exchange-sync and Remote Wipe.
You can find all the details about this upcoming software update on apple.com. [1]
iPhone 2 (the phone) on the other hand is entirely speculation. All we know (from several comments made by the Telco partners) is that there will be a 3G phone from Apple this year.
When the new phone will arrive and what additional new business features it may or may not have is still up in the air, but it really doesn’t matter for this article because the software update is already on track and a formidable threat for Blackberry.
I have heard the death of the blackberry for 10 years now – It’s an Apple/RIM world with Google lurcking.
Ha, good luck to RIM, who has no expertise selling in a fiercely competitive consumer market, facing up against Apple, the supreme consumer electronics company.
My wife tried out a Blackberry Pearl, returned it after a week. That OS is pure clunk-a-junk. If the 9000 as demoed is the latest iteration of the Blackberry OS, its OS is still going to be painful to use. Sigh, all those features which will mostly never get used because the geek’s-paradise-multi-menu OS is just plain too unwieldy.
“Having looked at the Bold’s reviews I think Apple should be worried. It’s light years ahead of the current iPhone model”
Um, really? And *how* exactly?
Navigating a tiny screen with a scroll ball – how quaint. Yep, real groundbreaking stuff there.
I’d hold your “light years ahead” nonsense until iPhone 2 is released. The Bold, after all, won’t be out for months.
hahaha…RIM is going to get so Jobbed. the screen on the Bold is so tiny it’s like looking through the slit visor of an ancient helmet. Real nice. Haven’t figured out a way to make your keypad disappear when you don’t need it yet, huh?
Think back to 2001 with the device AAPL released .
OH SO MANY claimed it to FAIL and FAIL BIG…
TOO expensive!!!! WHA WHA WHAAAAAA
its APPLE.. YADA YADA YADA!!!!!
mp3s on market ARE BETTER!!!! BLAH BLAH BLAH!!!
its THIS… ITS THAT!!!!! OH IT DON”T DO THIS OR THAT OR>>>
WHATEVER!!!!
Well people Boy Did AAPL FAIL… They Failed to the tune of 100+ million units sold.
I wish I could fail that bad.
iPhone 2007 = iPod 2001 x 100
Keep your heads in the sand boys and girls, the next 5 years are gona be FUN!
iJah420 last comment of today.
Until today I was steadfast on getting the 3G iPhone. but the 3G/GPS/Full Quarty keyboard Blackberry! It has everything I ever wanted.
Talk us cheap. Light years ahead?… Muhahaha. Sure it is. You keep telling yourself that.
Having both phones for use on trips, I have used the blackberry for years. When the Iphone came out it was all over. Blackberry would have to offer me a free year to stay with their phones. They are NOT user friendly at all. Yes there are a few applications that are on it that are great. Now that the Iphone updates are right around the corner the blackberry will most likely be going into the draw. With a phone like the Iphone once you use it you will know what you have been missing all these years.
This writer needs to look up the Cisco Iphone. Not the same as Apple’s Iphone.
Businesses will not be rushing to adopt the 3G iPhone en masse, contrary to the speculation of the AAPL fanboys and the company’s enablers in the media. Companies already have significant investments in RIM’s technology and won’t be giving it up for a flashy consumer-oriented phone with rudimentary Exchange support. Most companies lock out all of the multimedia capabilities anyway, so the question is just about moot. Just more AAPL BS.
If you read only Fortune blogs you would certainly believe that the Iphone will shortly displace the Television, Radio, Computer, Laptop, MP3 Player, DVD Player, Digital Camera, possibly microwaves/refridgerators, and virtually all other companies will become powerless to compete. First RIM will fall and shortly after Maytag…then the world! Does Apple even really need a PR department?
It is NOT about HOW MANY features you can pack into a device….
So many seem to miss this VERY simply point.
If the ui is non intuitive and painful to navigate the developers are doing their customers a disservice. Thats what the BOLD IS!!! take a look @ the video….in one word “CLUNKY”
http://www.youtube.com/watch?v=9wf41zgLf_M
Please people keep in mind AAPL is only rev. 1.0
Also keep in mind they develop on an extremely robust …. ( NOW WATCH THIS WORD)” Platform”….
The Apple device IS NOT a PDA…. It is IN FACT a hand held Computer….
Good Grief some people JUST DO NOT ” Think Different”
iJah420 says Good Luck RIM
I wouldn’t call the Blackberry Bold light-years ahead of the iPhone. It is thicker, has a much smaller screen which is not even touch-sensitive, let alone multi-touch, it only has 1GB of onboard storage which means you have to buy extra cards for more storage and it still only has a 2 megapixel camera.
The operating system is still as unfriendly as ever and the biggest complaint Blackberry users made about their phones in the recent Changewave survey was that the keypads are to difficult to type on with the keys being too small and close together.
No accelerometer, no pinch and spread, no online equivalent of the iTunes store for the purchase of music, TV shows, movies, rentals, games, applications, podcasts, etc etc.
The Bold does have some nice new hardware features like 3G, but so too does the next version of the iPhone and the iPhone will be out several months before the Bold. No, I wouldn’t call it light-years ahead.
-Mart
Is there anything, a tiny bit of something that the adulating admiration of the press (including this writer) can be negative for Apple?
I wonder.
The repeated talk about the lurking iPhone for business reflects a basic misunderstanding of business. Busines IT departments and most business folk do not want bells, whistles or features on wireless e-mail devices that they need to support — they just want wireless e-mail. In very many organizations — including all broker dealers — all of the options and features that have iPhone users excited (internet browsing, text messaging, games, etc.) are inactive other than basic e-mail, contacts and calendar functions. Among other reasons, brokerages for example are required by exchange rules to capture and save all business related e-mails (including text messages).
Having looked at the Bold’s reviews I think Apple should be worried. It’s light years ahead of the current iPhone model and unless Apple improve their offering substantially it’s just not goign to cut the mustard.
Economic slowdown may affect RIM, I doubt Apple will.
This “bold” is REALLY nice… might be better than the iphone.
This article is reporting rumors as news. There has been no confirmation on the release date or features for the next generation iPhone from Apple. A price reduction or discount from AT&T has also not been announced. This should have been made extremely clear.
Still, I live my iPhone and dislike the Blackberry so I hope it is all true.
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Windows Mobile will bury RIM? Get real! MS and RIM are both partners and competitors. For example, they recently announced MS Live Hotmail and Messenger for the BB platform. And RIM will be launching their OS on all Windows Mobile devices in the near future. MS isn’t happy about that though, because once people get the Blackberry experience on Windows Mobile devices, they will wonder why they didn’t get a Blackbery in the first place.