Function is the key: Why BlackBerry rules

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From the workaday businessman to the President of the United States, for years, the American white-collar workforce has found itself choosing the Canadian BlackBerry. But after a recent period of aggressive marketing and promotion by Research in Motion which has coincided with a flare-up in consumer smartphone spending, the BlackBerry is also looking like the choice of the general populace.

As Verizon's exclusive entrant in the four-runner race of touchscreen smartphones, Research in Motion's BlackBerry Storm has proven to be a success among business and non-business users alike. RIM CEO Jim Balsillie has been widely quoted this week as saying, "That product was a huge success in terms of sales and adoption," adding that a next-generation device is on the Storm roadmap, off-handedly confirming rumors that began in April.

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Even though more than half of RIM's 25 million subscribers now come from outside of the corporate sector, Balsillie said RIM views the consumer market as mostly untapped. So with the four dominant touchphones entering their second generation (numerous new Android devices, iPhone 3.0, Palm Pre, and now the "Storm 2"), the challenge for RIM is to extend the BlackBerry brand further into the general consumer population without alienating its original loyal base of enterprise power users.

"That's a tall order for any company to fill," independent analyst and Betanews contributor Carmi Levy told us Tuesday afternoon, "because it takes a very different set of core competencies to appeal to both of these target audiences. On the one hand, you're trying to reach regular folks who want to take their tunes and social media tools with them while they cart their kids to baseball practice. On the other hand, you're selling into businesses focused on keeping critical applications and data secure and accessible. That RIM has been able to reach these seemingly disparate audiences with one platform is nothing short of a masterstroke.

"RIM has managed to extend the BlackBerry brand into the consumer space without diluting its perceived robustness and security -- a key differentiator that has long set the company's offering apart from other smartphones," Levy continued. "In fact, for consumers who appreciate these things, having a BlackBerry has helped them justify using smartphones for things beyond basic messaging and contact/calendar management. The security of the BlackBerry platform makes online banking and other such functions an easier sell for consumers than it would be on competing, less robust devices and services."

According to an NPD market survey this week, three of the top five best-selling smartphones of 2009 were BlackBerrys (the other two devices were the iPhone 3G and the T-Mobile G1), and ChangeWave market surveys have consistently placed RIM at the top of the market, with recent data giving the BlackBerry maker a 41% share against Apple's 24%.

"RIM's decision to diversify its hardware offerings by targeting specific devices at specific markets has paid off," Levy said. "As popular as it is, Apple's iPhone proves that one form factor definitely does not fit everyone. The lack of an available physical keyboard is a deal-breaker for anyone -- business as well as consumer -- who needs to do a lot of text entry. RIM's strategy blankets a broader range of markets, ensuring each potential buyer has a choice of form factors that most likely fit the bill. As the iPhone platform matures, it'll have to sprout a number of physical alternatives to keep pace."

Where the iPhone has outshone all has been in its creation of a successful mobile application ecosystem, an area where Windows Mobile attempted to flourish, but never quite succeeded.

"Apple's iPhone has succeeded so enormously because its ecosystem -- the economy of applications, developers, solutions and services that now surround and support the device -- is so broad-reaching and vibrant. Apple has made it relatively easy for developers to build business models around creating and selling software through the App Store. RIM's App World validates this model and confirms the company's commitment to enhancing the value of the BlackBerry brand," stated Levy.

"As part of this effort, RIM has made significant investments in growing the size of the developer community. It will continue to pour resources into these initiatives, as a device is only as strong as the ecosystem that surrounds it. There's no reason to believe that continued focus on sober execution won't result in continued growth and competitiveness for RIM."

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