Why RIM Keeps Winning?

22 Comments

RIM, which had a nice second quarter is expected to have an even better third quarter, thanks to the new Pearl device they have just released and is getting an enthusiastic response. The company expects to add 800,000 subscribers in the third quarter, about 50,000 more than analysts expected. As a result, revenue in the third-quarter will be $780-million to $820-million versus previously expected $700 million. Earnings will be between 88 to 95 cents a share versus 78 cents estimated by analysts.

What makes the performance surprising is that RIM’s strong performance is coming when new competition looms large. Nokia E62, to be introduced shortly at $150 price by Cingular is particularly being viewed as a competitor. It can run all sorts of email services. It is a great smart phone, despite its bulk. So why does Blackberry keep winning?

Simple – it is the best damn email device… period! Nothing works like Blackberry. I had been using Nokia E61 with GoodLink, and it rocked. Except when you added the cost of having an hosted exchange and Good service on top of $50 a month data plan, it added up.


The other solutions – Microsoft ActiveSync only work if you have Exchange, and don’t work too well. The connection stops, the syncing stops and what not. Same is the case with other email clients like Seven. Most don’t play nice with Mac. RoadSync is the only good activesync solution. I frankly could not get Blackberry connect to work on my device, so I just gave up.

The frustration of not being able to get email – and I live on email – was enough for me to revert back to NY mode in a day. A quick pit stop at T-Mobile store, a hasty transaction and now I own a Blackberry. No not a Pearl , but 8700 series device. The email – which is being piped in using IMAP is working, so is Google Talk and Verichat.

Email is real push, not pretend push as in other devices. Cost $30 a month, much cheaper than having a converged device. I probably would never use the new device as a phone: Why should I? I have Nokia N73, N80 and 8801 to choose from, and they are just great phones. Nokia E61 would kill Treo, you can count on it. But for hard core email addicts, BB is the way to go. If RIM spent more resources on making its service reverse sync on IMAP (like Seven’s Always On Email service does) it would be perfect. An email-only device minus the trimmings? Yeah, that should sell too.

RIM co-CEO Jim Balsillie tells National Post:

“These new competitors coming out have been bringing their A game or best game to this space for over a decade. This kind of competitive reality has been there from the beginning when we didn’t have anything like the resources, position, capacity and experience we have today. It is a much more complex thing. If it was so easy, why did these best efforts not derail us from the beginning?”

22 Comments

Marc

Om, I am pleased you switched to the 8700 from the E61. The E61 with Blackberry connect on Cingular did in fact allow push email capabilities but always required rebooting when a call came in or went out as the Blackberry connect disengaged.

As far as server syncing on IMAP with the Blackberry 8700, this is in fact functional on the Cingular network. When deleting or reading or sending an email from the device as soon as you open your Mac to check your mail, all actions from the Blackberry are recognized on the Mac (an email sent from the BB will be found in sent messages on the Mac mail).

The Blackberry Pearl which my wife has (unlocked functioning on the Cingular network) works the same way and is a great device for less email intensive users.

As I have written before BB will always win as their service is reasonably priced and always releiable. As they inprove their hardware (Pearl and the new 8800) they will continue to grab a larger share of the consumer market.

Shlomo Weizmann

Much ado about nothing. Any IMAP server with IDLE function pushes emails to the standard Symbian S60 email client in Nokia E, N series. No need for any extra service.

Adam Rayburn

Competition is good for business – There is an explosion of WM5 devices coming out now and in the future on 3.5G offering full multimedia experiences which is a far cry from the proprietary BlackBerry OS. Activesync works, it is true push, and is an excellent alternative to Blackberry. I think the author of this article is maybe one of those anti-Microsoft individuals that still uses those defunct applications listed above in which Microsoft moved in on. The article seems like more of a complaning blog, but how can you stop the competition. Yes there are growing pains, but his standpoint wont stop Microsoft.

Ian B

As a long time Windows Mobile user I have to say that you are very poorly informed.

The MS Push eMail works faultlessly, including download of those big attachments over wifi if required.

Up to earlier in this year the Windows Mobile devices tended to suffer from trying to cram too much functionality in, however some of the latest handsets are rock solid and knock the Pearl for six.

Mobile operators are slowly starting to pick up the idea of offering hosted WM push mail accounts in the same way that they do currently with BB, after all it is a cheaper solution for them to deploy!

Ultimately the latest incarnation of Windows Mobile was designed with the enterprise in mind and they will no doubt aggressively chase the market, whose potential is huge.

Lastly, I couldn’t really let the following pass

“ActiveSync and its gazillion variants – it’s flaky, period. If it’s not flaky for you, you aren’t using it enough.
I’ve used it since it was dubbed “AirSync” (back in WM 2003), and every single iteration has its issues. More worryingly, it only works reliably when both client and server versions are perfectly aligned.”

I’m sorry but this is total nonsense, we currently have 30+ Windows Mobile devices at work (a large Aerospace engineering company)which have push mail direct from our exchange server, they are all heavily used, and the majority of the devices are used as a mobile phone too. The implementation was extremely easy and completed at minimal cost and the ongoing support costs are even smaller, RIM will have to change it’s enterprise model to compete.

George Karayannis

It’s all about the INTEGRATION. Yes, of course WM5 devices will eat away at RIM’s market share, just as the RBOC’s ate away at AT&T’s dominance of the long distance market. When you have 100% of the market, or close to it, there is really only one way to go as that market rapidly expands.

RIM’s advantage is the thoughtful integration of all mobile business functions (email, phone, PIM), along with controlling the infrastructure that delivers the email reliably to their partner customers.

RIM’s foray into the prosumer market will be successful — it’s hard not to be successful when you introduce a compelling product into a white hot market. But one very interesting note, which RIM made frequently in the past, is that less than 5% of all camera-enabled cell phone users purchased a data service, thereby limiting the recurring revenue stream to service providers. RIM’s customers, though, purhcased data services over 99% of the time.

So, Nokia and MSFT and the Koreans will win a lot in the consumer / prosumer ‘phone’ market that involve minutes and an endless assortment of handheld gimmicks. RIM will continue to dominate the market for sophisticated, network-enabled handhelds for business.

And as for RIM applications, one needs to look no further than the RIM partner website. All sorts of productivity applications, utilities, and CRM/ERP connectivity tools are available. My company, GPXS (www.gpxs.net), provides both a comprehensive productivity suite with Spell Check, File Explorer and Print2 fax/network/Bluetooth, along with a unique management tool to effectively and security distribute and manage applications to mobile devices.

Rui Carmo

Well, I’m late to the party, but here are my 0.02 Euro, in bullet form:

  • Best reason to use a Blackberry as phone – instant access to your corporate directory

(i.e., you can query for people beyond your address book). Killer app for folk in a multinational.

  • ActiveSync and its gazillion variants – it’s flaky, period. If it’s not flaky for you, you aren’t using it enough.

I’ve used it since it was dubbed “AirSync” (back in WM 2003), and every single iteration has its issues. More worryingly, it only works reliably when both client and server versions are perfectly aligned.

  • Devices:

Symbian clients for ActiveSync on UIQ devices (which are third-party) crash often, don’t give you full functionality. I’ve also used it in about 6 different Windows Mobile devices (from Pocket PC class to SmartPhone Edition), and in most cases the Blackberry client worked better (less traffic, more reliable push, great on-demand “get more” functionality).

On the Nokia E61 and E60, it also has several platform-specific issues (by way of forced conformance to Series 60 limitations), and wastes battery. Again, the Blackberry client works a little better.

As to the 8700, it is an excellent platform (regardless of variant). I have used my 8707v in several trips as a UMTS modem (Windows-only, I’m afraid…), and the keyboard is still much better than the SureType alternatives. Plus you can read several lines of text in it and still have a moderately decent font size.

Tony

Interesting story. I have experimented with both BB’s and the Windows Mobile 5 devices. I switch back and forth all the time. The BB is a great email device that just works. Period. The software onboard sucks really badly. There are very few addons worth anything, the phone is not that great but it works. These days just working is the most important feature in a product. The BB proves it.

As for the WM5.0 devices, they are more extensible, you can get great apps and you have the freedom of many devices to choose from, but, the OS is sucks. It crashes frequently, email works and then stops, sometimes it notifies you when an email arrives sometimes it doesn’t, etc. etc. As Om suggests, it cannot be trusted which in terms of todays standards is not acceptable.

The only way that I see MSFT competing is for them to start emulating RIM and make their own device where they can guarentee that their software will work properly and be able to certify add-ons that do not cause instability. Creating an OS for OEM’s in the mobile world is just not possible. Their are too many fragmented pieces of hardware and many versions of radio drivers, etc. that make it very complex. RIM only deals with a few versions of their software, they dont innovate and they keep it simple. It works and they win…

Chris Seilern

There is only one response to Om’s comment on the resurgence of Blackberry:

Wordperfect
Lotus123
Lotus Notes
FoxPro
Harvard Graphics
Palm
Apple
Eudora
Netscape

These were all extremely dominant segment inventors. And yet MSFT has come along with inferior and bug ridden products, only to completely destroy these companies.

Products are nice, but in the end they don’t matter. And the guy who sells more because he is better at selling will win. Period. Just go to your local mobile phone store and count the number of Windows mobile devices vs the number of Blackberry devices. Ask yourself what the answer to that question would have been 2 years ago, and try to figure out what it would be in 2 years.

So what do you think will happen with RIM?

Jeffrey

Om, I have never seen the issues that you have with Activesync over-the-air. I’ve been using it since the release of the first AKU 2 build last year and it works perfectly everytime. Plus it is much cheaper for small- to mid-sized businesses than the Blackberry solution (in both the server infrastructure and the fact that most phone carriers have much more expensive internet plans for Blackberry devices)

Kunal

with plain email BB may have edge, but applications rock on wm5. I run vpn, gps navigation, outlook, streaming radio on my xv6700 . BB users can’t match that.

scott

Wow, so the overall response from the comments is that BB is the way to go over TREO, etc. Everyone that I know never has a BB problem but does with TREO.

I keep holding out because I didnt want the square bulky devise…and the whole crackberry scares me :)

Marty Hahnfeld

Funny you mention E61 + Goodlink, I just switched from a Treo 650 + Goodlink and am pretty underwhelmed by the new combo.

Goodlink itself works very well on both devices, but the integration on the E61 lacks in many respects vs. the Treo. No integration to the phone (example: no caller ID name from Good contacts) or phone alerts (calendar, email, etc do not alert to Symbian) are the biggest complaints, its just a standalone application on the E61. I will probably go back to the 650 despite the Nokia being a FAR superior device in almost every respect.

km4

Market researcher IDC, however, rained on RIM’s strong announcement. In a report titled “Attack of the BlackBerry Clones”, IDC said the popular handheld faces growing competition “in a relatively untapped market, converged mobile devices for the enterprise.”

As that market grows to 63 million units per year by 2010 from just 7.3 million last year, the BlackBerry’s overall share will decline, according to IDC.

While RIM has set the standard in the industry, Microsoft is coming on strong through partnerships with Motorola, Palm, and others. As the market for converged mobile devices grows, IDC expects Windows Mobile handhelds to grab an increasing share of the pie, for a 32.3 percent share of the market by 2010.

Nokia is another major rival to watch out for in the future, since it is already offering an end-to-end solution of its own, IDC said.

“Several BlackBerry clones have previously attempted to challenge RIM’s reign in the enterprise market, but this is a more formidable strike,” said Sean Ryan, research analyst for IDC’s Mobile Markets, in a statement. “The timing is right for a more powerful attack against RIM’s BlackBerry as competitive forces converge.”

David Shore

You really should try chatterEmail on a Treo.
True push over IMAP, no Exchange, one time fee to purchase.
This is the best by far…

Nick Hawkins

I’ve had a BB going on 4 years now and I love it. It works. My corporate email is pushed to the device and it’s been a workhorse for me in close to 20 countries. It just works.

But now I get the same functionality with WM5 devices now. Cool. But after a few years of using Blackberrys, people don’t want to switch. They’re hooked on the wheel.

Qasim

I’m with you 100% Om – the only real disadvantage to my 7100, despite it not being 3G, is the whole reverse sync business.

Oh wait – there’s something else too, you see, I would love to turn email forwarding/IMAP syncing on/off at whim to avoid email back-log coming onto my phone, when, say, I’m in front of my PC… right now I have to delete the IMAP email accts from my BB services then add them again to turn the syncing on…

jim mcmurry

Om,

I agree that Blackberry service is key. That is why I use a Nokia E-61 with the Blackberry client. I get instant push email, just like a Blackberry device, and I get the added feature of WiFi, 4 cell modems, Opera, etc.

All in all I am not yet jealous of the Pearl or any other RIM made device. That may change later in the year however.

(now if the rumored Apple iPhone was really a PDA and had Blackberry client…that might be really cool)

jm

Eliot

I happen to use the Nokia 9300 w/ Blackberry Push. I get from my BES Wireless Calendar Sync, E-mail, Contacts etc. Fantastic! The keyboard is a bit funky (I traded my 7290 to go to this), but it has 99% of everything I want, and more. Significantly more functional that than the RIM. Google local maps applet on the phone looks amazing.

The only thing the 9300 is lacking is a camera, but the 9500 does have it. Its a VERY good device, if the keyboard was a bit skinnier I’d say its the perfect device.

Kevin C. Tofel

Om, I don’t disagree with 99% of what you say here (and I say that as long time Windows Mobile user), but one statement is slightly misleading: “[Blackberry] Email is real push, not pretend push as in other devices.”

With the MSFP or AKU 2 update as it’s called, Windows Mobile devices DO have real push e-mail. I’ve used it for several months with nary an issue and I get hundreds of e-mails per day on my XV6700. In fairness however, my service does require a hosted Exchange server that I pay for, so it’s not all roses and certainly not as compelling as Blackberry, i.e.; I agree with your underlying points…as I often do! ;)

sunil

They are going for the prosumers – the Pearl is a killer device. Get past the suretype and it looks like a normal phone.

I think aside from the BlackBerry Pearl units, the activation of BIS or BlackBerry personal plan (at Cingular if the Pearl every makes it there this year) will boost in subs.

Jason Hunt

We run about 12 blackberry phones from the 7280 to the 8700 series. Hands down the best combo pda/cellphone as we have tried them all. Also we run blackberry Exchange server and it does reverse sync.

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