Can RIM Make the Transition From Enterprise to Consumer?

The first time I saw a BlackBerry was at a Soundview financial conference. Research In Motion was showing off its latest two-way pagers. Impressive enough, I remarked, but I had no use for another e-mail address. What I really needed was the ability to access my corporate mail on the go. I was quietly ushered away and given my first demo of the BlackBerry device and service. It was love at first click. While RIM didn't invent the smartphone category, pretty much every device we use today owes something to that first iteration of a truly wireless e-mail gadget.

The first BlackBerries were known for one thing: instant access to push e-mail and the ability to sync your in-box with your corporate mail, on the go. Over the years, RIM has added calendar and contact sync, Web browsing, color and touch screens. At the heart, though, is the power of push e-mail. The BlackBerry basically remains a one-trick pony, but it does that trick extremely well. Unfortunately, relying on that trick is not going to be enough to keep RIM relevant in the market going forward.

The problem for RIM is that others have learned to do that trick as well. It took some time, but now Microsoft 's platforms offer tight integration directly to Exchange, which remains the corporate standard for e-mail. In addition, by licensing the Exchange ActiveSync protocol, Microsoft has given vendors such as Nokia, Palm, Apple and others the ability to offer that core wireless personal information management functionality.

That in itself would be an issue, but it gets worse. Users' mobile expectations have evolved. Communication is still what consumers want most from a mobile device, but now they expect the ability to reference information, browse the Web, consume entertainment and play games. It's with these functions that RIM's platform starts to severely show its age. Yes, RIM does have an app store, but in almost every case, the same app running on other platforms is far richer. Games on the BlackBerry are not close to state of the art. RIM's Web browser is far behind the WebKit experience, which is fast becoming the standard for mobile devices.

Of course, BlackBerry is still a hugely popular platform. For many business users and IT departments, it's the only choice. In fact, an alien who landed on Earth and boarded the Acela train from New York to Washington would assume each earthling not only wore a blue suit but also owned a small oracle with a keyboard they were constantly consulting. RIM's problem is that much of its success depends on inertia -- it's a snapshot in time. But with the enterprise market saturated, RIM must find ways to evolve its platform to be more competitive with changing user needs. While recent acquisitions show that RIM is slowly picking up some of the parts that it needs, such as a new kernel and better Web technology, it will need to accelerate the process of integrating those features into a new operating system -- as well as a more coherent marketing campaign to better explain RIM's offerings. (Some of RIM's recent commercials have been so arcane, I didn't even realize they were for the BlackBerry.)

Ideally, RIM needs to transition to a new platform entirely rather than attempt to evolve its current offerings. If a modern platform suddenly became available for sale that RIM could use to leverage its core strength, while providing new features, it would be wise to become a bidder. Otherwise, the BlackBerry might become a bit of nostalgia, eclipsed by later entries that were more capable for today's growing needs.

Michael Gartenberg is a partner at Altimeter Group . His blog can be found at Gartenblog.net . Contact him at gartenberg AT gmail DOT com . The views expressed here are his own.

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