RIM's Hold on the Enterprise Mobile Phone Market

There is an enormous amount of angst among some Canadians regarding the future prospects of RIM. It seems that since the demise of Nortel they have been burdened with the title of Great Canadian Technology Hope. The worry goes further of course, since due to their size they have a large investor base and there are legitimate concerns with its ability to compete against technology darlings Apple and Google with their iPhone and Android mobile phones and eco-systems.

RIM does have a loyal market for Blackberry, and that market is growing. It's their market share that is at risk. Blackberry, iPhone and Android are each growing their market as they jockey for appeal to the disparate segments of the smart phone market. Blackberry primarily appeals to the enterprise market, and its attempts to become interesting to consumers have not always gone well.

But kids don’t want Blackberries. They want cheap phones that run instant messaging, SMS, and email. Need a keyboard? Get a MyTouch Slide. Want a big screen? Maybe an EVO 4G.

Perhaps the Torch and OS6 will get them there, or maybe not, but they will press on regardless. Similarly, Apple strives to reach out to enterprise market from the consumer market where they currently dominate so completely. They, too, have their challenges. Then there is Android which has a more diffuse base, though slanted more toward consumers; Google appears to be leaving it to the device manufacturers to decide which markets they want to address while they focus more on total numbers rather than who those users are.

Something I do feel confident predicting is that, ultimately, the smart phone market will be the same as the mobile device market, which is the expected end result of decreasing component prices and lower cost of fewer standard platforms; every phone will be a smart phone, and many mobile devices (tablets, netbooks, etc.) will utilize the same platforms. There is room in that future market for more than one platform, and indeed more than two, but perhaps not more than three (apart from niches). But for the present let's look at what it means that different platform appeal to different market segments.

Business users love their Blackberrys and they love their Blackberry email. I am not a Blackberry user so I always find it both fascinating and amusing to watch people in meetings constantly glancing at their devices. When they do pick up a message and respond, they do it with the speed and finesse of long experience. It is easy to see why even now when the platform is quite old as technologies go that Blackberry received the moniker Crackberry.

Another funny thing about dedicated Blackberry users, in particular those in the technology circles in which I operate, they love playing around with iPhones and Android phones. The touch screens, the colours, the apps, well most everything about them appeals to the engineer turned executive. But once they're done playing with a colleague's phone they feel a vibration or hear a quiet ping and they drop it, now completely forgotten, to check the latest incoming message on their Blackberry. It's almost uncanny how often I've witnessed this occur. These are not people that will easily abandon RIM products and services. To them, the newer generation smart phones are eye candy and nothing more.

Another aspect to this Blackberry attachment in the enterprise is its hold on the companies whose employees need email on the go, and its bizarre impact on their employees. Many times I have sat down to lunch or a coffee to discuss business with someone who will first pull their phones out and place on the table. This is done not only to watch for messages but because, light as they are, it is still a relief to detach the weight from their clothing when they can. However it's what often happens next that I find so interesting. After the Blackberry is on the table they pull out another phone and similarly place it on the table and, if you can believe, some will even pull out a third phone and do the same.

When this first starting happening I would stare at the person opposite with the unspoken question hanging in the air between us. They would then feel compelled to explain. The Blackberry is used only for email, not phone calls, since that is the mobile device approved by their IT department and integrated with the company's email system. While it can be used as a phone, and may indeed have a contract and number assigned, the person does not use it that way. Instead they have another phone for business calls. These are frequently sales people with a large network of contacts who feel a need to keep the same phone and number when they more among employers. To them it is vital that they keep their phone number sacrosanct so that everyone can always find them, and they often can't do this with the corporate Blackberry or, they worry, they may not be able to get their number back when they next change jobs.

The third phone, when there is one, is something like an iPhone which they use to play with and perhaps to stay in contact with friends and family. This isn't strictly necessary since smart phones can each do so much but they do it anyway. Perhaps it's the keyboard on the business phone (sometimes their first two phones are both Blackberrys) or perhaps it's the the social networking, apps and music on the personal phone that drives them to act this way. If you've ever watched a Blackberry user struggle to do something on their phones other than email you'll know why (at least pre-Torch and OS6) users do currently need another device for entertainment and general internet use. While I don't have a Blackberry I do carry two phone: a pretty basic feature phone that is just a phone, and an Android phone for internet, email, apps and much more.

The thing is that as smart phones become the norm and they all more-or-less support the same functionality there will be a change among enterprise users as they make use of the hardware varieties and new cloud phone services like Google Voice to eliminate the current ridiculous situation by reducing back down to one phone. That phone will have to support multiple numbers and possibly phone clients (including VoIP), and sport a keyboard for those unwilling to undertake the learning curve to become proficient on a soft keyboard. The big question is, which phone will that be?

Ponder that while RIM tries once more to make a splash with consumers. Will enterprise users drop their second and third phones if they can? Will enterprise IT departments loosen their choke hold on employees' phone and service choices, and in particular will they ever become truly comfortable with iPhone or Android devices? Until these questions are suitably resolved, many business people will continue to own more than one phone and dominance in the enterprise market will continue to be held by RIM.

Blackberry and RIM are a long, long way from becoming irrelevant. I will also say that the current concerns of some governments over Blackberry email security will not only not harm RIM but will help them; it's great (and free) advertising that their encryption and security perimeter are so strong that even governments can't break it. Users and their companies get the warm fuzzies just thinking about that fact.