How RIM can avoid a premature endgame for BlackBerry

Once not so long ago, if you wanted bulletproof e-mail on a mobile device, you bought a BlackBerry. Research In Motion, the company that practically defined wireless messaging a decade ago, has done quite nicely for itself since then, garnering over 56% of the market for smartphones in the US and about 20% of the overall wireless handset market that includes smartphones as well as conventional feature phones. Its end-to-end encryption and still-unique service paradigm that routes messaging traffic through secure Network Operations Centers further endeared the platform to enterprise buyers, even as the company was successfully pushing the franchise into the consumer space.

Unfortunately for RIM, nothing stays the same in the increasingly competitive wireless market. The BlackBerry is no longer a market of one, and many of the features that defined the platform -- including push e-mail and enterprise-class security -- are no longer unique. Worse, the critical feature set for a modern smartphone has expanded to include rich Web access, broad application availability, and an integrated, Web services-aware operating system. It's no secret that the BlackBerry platform lags in all of these areas with its fine-for-the-1990s browser, relatively paltry app ecosystem, and an OS that despite regular incremental updates still betrays its decade-old roots.

As investors push RIM's share price down, and the drumbeats grow louder to aggressively address these shortcomings, the company finds itself at a crossroads. Either it radically changes the strategy that's driven its growth to-date or it risks becoming an also-ran in the US market. Nokia, whose devices once accounted for over 35% of all US sales, lost the script when it misread Americans' growing taste for affordable, feature-packed, and well-integrated smartphones. Today it's American market share languishes at barely 7%.

It's a lesson that RIM would do well to learn, because at this critical inflection point in its history, a stay-the-course mentality could doom RIM to a Nokia-like fate.

To maintain leadership in a market that grows more competitive by the day thanks to continued strength from Apple's iPhone and a rapidly building frontal assault by Google's Android, RIM needs to focus on some fundamental changes, including:

• Simplify the product lineup. The almost overflowing BlackBerry product tree stands in stark contrast to the singular focus of Apple's iPhone hardware. RIM sells dozens of devices through countless carriers, often so subtly differentiated that even hard-core fans can't keep track. Sure, most BlackBerry aficionados know that a device number that ends in 30 has built-in GPS, while one that ends in 20 includes Wi-Fi. But the finely sliced marketing messages demanded by such a broad product line tend to dilute the branding effort. As beneficial as multiple devices and form factors have been in terms of appealing to consumers (and carriers) with different needs, they've also dimmed how the BlackBerry is perceived in the minds of potential buyers.
• Get serious about courting developers. Application developers care about two things: development effort and profit potential. As it stands now, RIM loses on both fronts. The tools to develop software on the BlackBerry platform are too cumbersome to use, which extends development time and effort. And since the BlackBerry app market itself is just a fraction of the size of its major rivals, there's less opportunity to drive revenue. Compared to iPhone and, increasingly, Android (which already has well over 10,000 apps to RIM's 3,000 or so) it's a no-brainer: BlackBerry development loses every time. RIM has had ample time to bring a streamlined SDK to market along with easily accessible training and support resources for developers. It's also had lots of time to go for Apple's jugular and point-for-point pick off the things about iPhone development that tick developers off (I'm looking at you, opaque approval process). And to be fair, it's making progress. Just not as fast as it should.

• Fix the browser. You can't write a product review of any BlackBerry without calling out its lame browser. While competitors have moved on to multitouch-capable interfaces that closely mimic the conventional desktop Web, RIM's offering hasn't changed much since it was first introduced. The result is a stripped down, slow, often frustrating online experience. In fairness to RIM, it's doing something about it. This summer, it acquired Torch Mobile, which makes the WebKit-based multiplatform Iris browser -- a deal that's expected to bring a new standard browser to the BlackBerry sometime in 2010. It can't come a moment too soon.
• Find a new differentiator. Rock solid, enterprise-class, push-based e-mail is yesterday's news. And even if it wasn't, consumers don't much care about it anyway. Apple's got the application ecosystem to end all application ecosystems. Google has tight Web services integration. Palm has an innovative UI that blurs the line between local apps and the cloud. What's RIM's unique story going to be? The company isn't saying, but unless it comes up with something to differentiate itself, its good-enough strategy that matches competitors feature for feature will guarantee a long, less-than-comfortable decline as newer, more unique solutions hit the market. Motorola's Droid may hold some lessons here, as it illustrates how a hardware vendor can come back from the dead with an offering that moves the mobility bar solidly beyond basic e-mail and Web browsing.
• Learn from the Storm. RIM's first touchscreen device, rushed to market to capture holiday shoppers' interest, was by all accounts a botch. Yes, it ultimately sold well, but its rocky launch tarnished the formerly invincible brand and illustrated the perils of timing product releases to unrealistic seasonal buying patterns. If the engineering isn't fully baked, no product should ever see the light of day. Similarly, devices without Wi-Fi have no place in today's market. While RIM avoided ticking Verizon off by deleting the feature from the first generation Storm, it alienated consumers who simply expect this in anything they buy today. RIM repeated the no-Wi-Fi mistake with the Tour, and one hopes it won't happen again.

While the BlackBerry franchise doesn't face an immediate risk of extinction, its long-term success -- and the success of the company that spawned it -- could be compromised...unless RIM drops the overly conservative mentality, and starts swinging for the fences. Nothing short of a radical re-think will keep the BlackBerry as dominant in the future as it has been in the recent past.

Carmi Levy is a Canadian-based independent technology analyst and journalist still trying to live down his past life leading help desks and managing projects for large financial services organizations. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.