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Does the BlackBerry 10 launch really even matter?

28 Jan
BYOD: Where RIM's real future lies.

BYOD: Where RIM’s real future lies.

Does anybody else have the feeling that this week’s launch of BlackBerry 10 doesn’t really matter? It’s not for anything that Research In Motion is or isn’t doing with its long-awaited and overdue handsets, but rather because mobile devices are on their way to becoming commoditized.

With smartphones, it’s Google that’s driving the trend. As with virtually every area of its business, the company isn’t so interested in selling things to consumers as it is in getting them online and using its services, with the money coming from the ads it serves them that way. That’s why Google is selling the Nexus 4 in North America for $300 without a contract, while in the developing world it’s moving smartphones for just $50. It’s also why Android has more than three quarters of the world’s market share for smartphones. If Google knew the first thing about actually selling stuff to consumers, the constantly sold-out Nexus 4 would be an even bigger deal than it is.

Neither the Nexus 4 nor those African phones are as high powered as most of the “hero” devices being sold in advanced markets, but for many users, they’re good enough. With Google plying this very different agenda, smartphone prices have only one way to go: down.

That’s good for consumers as it will ultimately change the way phones are sold here in North America. Cheap handsets means consumers won’t need to sign on for subsidized contracts with carriers. And with no contracts to lock them in, carriers may actually be forced to give consumers better service and prices.

But it’s bad for phone makers. The healthy profit margins enjoyed so far by the likes of Samsung and especially Apple are coming under pressure, which is why there’s been so much chatter lately about the possibility of a cheaper iPhone.

Apple’s chief executive Tim Cook has tried to deflect such talk by saying he isn’t interested in “revenue for revenue’s sake,” yet the company’s previous actions speak volumes. Apple did launch the cheaper iPad Mini last year in response to pressure from Google and Amazon, who together set the new price agenda on that category with their own smaller and less expensive devices, the Nexus 7 and Kindle Fire, respectively.

Phones and tablets are inevitably following computers into commoditization. Apple may still charge a premium for its products, but it will ultimately have to settle for a relatively small market share as a result, just as it has in computers. There is also a limit to that premium – with the likes of Google and Amazon setting the pace, the respective days of $700 smartphones and $500 tablets are numbered.

Which brings us back to BlackBerry. With shrinking margins on the horizon, why would anyone want to be in the smartphone or tablet market? Monolithic conglomerates such as Google, Samsung and Apple can afford it because such devices are but two pieces of their much larger wholes – they can take a bath on phones and tablets since they pay off in other ways, like keeping people within their larger ecosystems.

For a much smaller, single-purpose player such as RIM (or Nokia), which don’t really have anything else to offer consumers, that low-margin future isn’t very appealing.

It’s no surprise, then, that RIM may be looking to pull an IBM, where it would sell off its hardware business to focus instead on software and services. It’s ironic that the same company involved in IBM’s computer spinoff nearly a decade ago – China’s Lenovo – is the latest potential dance partner to be attached to this idea. And it’s not just speculation; RIM CEO Thorstein Heins says he is considering doing exactly that.

The smartest thing currently going on at RIM is the development of BlackBerry Fusion, or the toolkit that lets businesses manage all the different phones being brought in by employees. This bring-your-own-device niche is one where RIM’s current competitors are unlikely to go – and it’s potentially a high-margin business, at that.

Put these trends together with Heins’ oddly timed comments about a potential hardware sale and it’s tough to get excited about this week’s BlackBerry 10 launch. It may just be a lot of sound and fury that ultimately won’t matter much, since RIM’s real interest – and future – lay elsewhere.

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7 Comments

Posted by on January 28, 2013 in apple, Google, RIM, samsung

 

7 responses to “Does the BlackBerry 10 launch really even matter?

  1. Marc Venot

    January 28, 2013 at 12:47 am

    Let focus on RIM. You should talk about their features in this OS 10 that it are better or worse than the competitor, for example the virtual keyboard and its guess.
    We know that the market is very volatile with a fast renewal rate and few legacy programs to tie customers, beside the commercial ones that you have criticized here.

     
  2. Jean-François Mezei

    January 28, 2013 at 1:55 am

    RIM still has a major differentiator to attract its loyal niche customers who demand a keyboarded device. It is a market abandonned by the major manufacturers so RIM has a chance to capture that market to itself.

    Unfortunatly, RIM isn’t launching a keyboarded device this week. It is launching an iPhone clone. So RIM customers will have to wait a few months before being able to replace the aging existing phones.

    RIM’s chances of revival will be measured on initial sales of the keyboardless and will not include the potetial sales for all its current customers who are waiting for a keyboarded decide.

    If RIM had launched both devices at same time, it would have had a greater impact with the first results and given RM some momemtum and better outlook for survival.

     
    • Glen Danzig

      January 28, 2013 at 10:35 am

      Did you see this? It appears that the X-10 will also launch on 30 January, 2013.

       
      • Glen Danzig

        January 28, 2013 at 10:36 am

        h t t p : / / http://n4bb (dot) com/blackberry-x10-series-launch-january-30th/

         
  3. machinecodeblue

    January 28, 2013 at 7:46 am

    The BlackBerry 10 is no Apple clone. I made the switch to Apple or year ago and I bought into all of the Apple hype the iPad the iPhone and the Mac.

    What I discovered is that the iPhone is a very poor tool for keeping track of your communications with other people.

    There is simply no easy way to backup your SMS messages or to coalate messages with emails and other communication in a consistent conversation flow.

    Further security protocols for iMessage are awful. Very quickly you realize how easily someone can take over your iMessages from their own device simply by determining your username and password.

    Finally the voice tool known as Siri was an interesting innovation but has simply not kept up with other technology.

    The new said 10 is unbelievable as a piece of hardware because it does things that are simply impossible to do on the iPhone today.

    Also considering BlackBerry has confirmed that 600 of the top applications from both the android and iPhone platforms will be available at launch date in addition to tens of thousands of new applications the impetus will be very clear. Consumers I have no doubt will embrace this product.

    Just as importantly the fact that BlackBerry has multiple ways to develop an application. You don’t have to give up the skills you’ve already learned on other phone platforms to build or BlackBerry 10.

    There is huge developer love that I’m beginning to see across the spectrum from developers who just months ago laughed at the thought of doing anything for BlackBerry.

    Apples draconian behavior to its developers will ensure these people continue to flock to the migration tools for this product as well.

    For Apple users and Apple application designers BlackBerry’s new OS and it’s intuitive User interface will be very tempting from a design perspective.

    Finally the simple fact the BlackBerry 10 browser beats even the performance of Google Chrome on a fully loaded Desktop is impressive.

    Make no mistake developers and designers will love the new OS consumers will love the new communications power.

     
  4. Fingers crossed

    January 28, 2013 at 10:27 am

    I’m surprising myself by actually being optimistic about RIM. Perhaps it’s that the shine is off the Apple now and fickle buyers are looking for something new. iOS seems to be a bit stagnant. My needs are simple and are being met by iOS, and having things like AirPlay are nice. Plus, I’m in the Apple eco-system so it does get expensive to break free. So I’m not the target market for BB10.

    But I like gadgets so it will be very interesting to see what RIM can do that’s better than iOS or Android. I have a lot of respect for QNX but it’s really the apps that run on QNX and how well crafted they are that will make the difference.

    The thing I’m worried about is the pace the RIM staff has had to maintain, 6-day weeks since July, and how they can continue to innovate and ensure quality without burning out their staff.

     
  5. Tom

    January 28, 2013 at 6:09 pm

    I think Peter is brave to write anything that isn’t 100% pro-RIM at this time. The comment I’m replying to is the sort of thing that a-waits any Canadian who says anything negative about RIM in the run-up to the launch of BB10.

    I personally would love to see BB10 be successful, but I am saddened to see Canadians toss aside objectivity in these last few weeks, and turn instead to some sort of nationalistic fervor.

    The Globe has started running marketing pieces for RIM, culminating in this morning’s editorial. Looking at the comments section I was relieved to see that the top rated comment ripped the Globe for writing such a ridiculous editorial – glad to see that the commenters have a limit!

     
 
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