ThoughtPiece: Why RIM and Verizon Need to Get Closer
With all of our new staffers breaking in their shoes, it’s nice to have a nice worn in piece of work like Thought around for familiarity sake (and, you know, a good read, too). This week he examines the somewhat paltry relationship between RIM and Verizon and why things could and should be better.
Why RIM and Verizon Need to Get Closer
Let’s face it: last week Steve Jobs spoke and the whole world listened. When was the last time the announcement of a cell phone attracted such widespread attention? There is no doubt that the iPhone will sell, as long as it delivers on its promises. That is significant not just to Apple, but to the carrier with exclusive US rights for at least the next few years, Cingular/AT&T.
Which brings me to my point: there is a huge opportunity for RIM and Verizon in the consumer market if they can just bring out the newer, more exciting BlackBerry models soon enough on the Verizon network. Cingular will have the iPhone, and there is no doubt that the iPhone will hold the title of the coolest, hippest mobile device around. However, in the US Verizon has almost as many subscribers as Cingular, and is on course to surpass them. Many may be attracted to the iPhone on Cingular compared to the aging designs like the BB 8703e or 7130e on Verizon. However, a BB 8900/9xxx type phone on Verizon will be a different story: many will find the value added proposition of such a BlackBerry enough to stay or migrate to that carrier. Consider how it would differentiate itself from the iPhone: the best network, 3G, internal GPS, voice dialing, all in a form factor that would still be sleek and stylish, with the added bonus of a true keyboard for better text inputting and the vaunted BlackBerry email system. Now that’s a device that can compete very well against the iPhone, and even more so if it could be released before the iPhone hits the market in June.
Some may wonder why it matters. The iPhone will sell, but even Jobs admitted he is only aiming initially for 1% of the worldwide market by the end of 2008. That’s a niche product. There will still be plenty of sales and growth to go around for everyone, including RIM.
But that’s only part of the picture. The market that Apple is aiming for may be a niche, but it is the high end niche, which means the greatest profit margins. I’m sure Apple is all too glad to allow competitors like Motorola, Nokia, LG, and Samsung fight it out for the free cell phone market.
Success in the high end of the market tends to carry the greatest influence on corporate image and reputation. That in turn can drive sales of other products by the same vendor, as well as create demand for the future.
Most importantly, we know that Apple will not stand still, and will aggressively follow up with new versions of the iPhone that will carry better features and lower prices. Consider the iPod lineup of today versus the very first iPod, and you get an idea of the evolutionary branching that can occur. Plus, there are even more possibilities with the roadmap for the iPhone than with the iPod. What that means is that Apple stands a very good chance of going on to capture far more than 1% of the market.
RIM’s biggest market is the US, and it’s time they stopped relying mostly on Cingular to drive sales of their new products here. Cingular already treats RIM like a second class citizen when it comes to marketing. In the next several months it will be even worse, as it will be all iPhone all the time with Cingular marketing. Verizon’s large and loyal market represents a huge opportunity for RIM as they introduce their next generation models, and a nice response to the increased competition in the consumer space. Now if only RIM will seize that opportunity.