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Wired article: 5 things RIM needs to fix is a little off base



Wired recently published an article entitled “5 Things RIM Needs to Fix in its BlackBerries[sic].” The article is a great read, but I’d like to address a few issues with what Wired thinks RIM needs to improve.

The article goes on to highlight the following 5 areas where RIM needs to improve:

  • Browser
  • Touchscreen
  • App Store
  • WiFi
  • Desktop Software

Overall, I’m going to wholeheartedly agree with the list. RIM can always be improving every aspect of the BlackBerry platform and the company has plans that extend well beyond our current gripes.

Generally, the article missed out on explaining how RIM came to lack the features requested in the article, and how they must go about improving the situation.

It’s always important to note that the BlackBerry platform wasn’t founded on being a consumer device. RIM fell into the consumer market almost by accident. As more consumers adopt the device, the company is now faced with satisfying two, almost mutually exclusive markets.

Take for example the browser; highlighted in the article as being something sub-par and needing improvement. You can’t disagree with this but again, why are we here? The BlackBerry platform has always been focused on delivering totally secure communication for enterprise, and the browser was secondary to this focus. While it’s possible to update this browser and offer more functionality such as the ability to download files from the browser, there is a lot to take into consideration, not just the user experience. With each feature addition, you have to asses the security risks associated with said feature because it’s paramount to the brand.

The same argument applies to many of the other items on the list. App World, the touchscreen interface and the desktop software are all features of the BlackBerry platform that are lacking from a consumer perspective. But again, we’re moving from enterprise to consumers and the enterprise is still the most important market. Do you think government organizations with 50,000+ BlackBerry devices and an IT administration department controlling device policies care about a multitouch Storm? No, they care about a secure smartphone platform, and in this respect RIM is the best in the industry.

Another issue the article mentions is WiFi. The author asks: “why doesn’t the company have Wi-Fi in all its devices?” While there are probably a lot of reasons why, two come to mind and I’m surprised the author didn’t point them out.

1) Price: Offering WiFi significantly changes the price point of a device and RIM needs to be able to offer a wide range of prices to satisfy various markets. This is why the Curve is the number 1 selling smartphone in North America. The device comes in many iterations with varying prices for every type of user.

2) Carrier relations: When the user is on WiFi they aren’t burning through data and when they aren’t burning through data they aren’t spending more money. There are clearly deals going on at the executive level to stop certain devices from having WiFi because it’s good business for the carrier. You have to play ball with the carriers to get your product out there.

Overall, the article was great but writers are quick to forget where RIM is coming from, and where their allegiance lies. The consumer market is new to them and rest assured they’re getting there, but enterprise is what made this product great and they aren’t about to compromise the founding principles of the platform.

Read the Wired article for yourself.


AT&T subscribers will require data plan with smartphone purchase



Why would anyone want a smartphone without a data plan? That’s like buying a Ferrari with a Ford engine. Sure, the device looks stylish, but you need data to unlock the true power of your BlackBerry. Anyways, preaching to the converted.

As of September 6th, 2009, AT&T will begin requiring that all smartphones sign up for a smartphone data plan. Customers who activated their smartphones prior to September 6th, may continue to carry around a BlackBerry as a status symbol while not taking advantage of their device’s awesome powers. That last part should have been included in the official email.


Device margins get smaller in competitive smartphone market


BlackBerry Storm

On Thursday, RIM will be reporting results for the first quarter of fiscal 2010 after the close of the market. We’re expecting some good news from RIM in light of the current competitive smartphone pricing environment.

With the $99 iPhone and the Palm Pre launch, the smartphone wars have become much more intense. This is forcing RIM and other smartphone manufacturers, who wish to capture more of the consumer market, to lower their prices to increase sales. We have recently seen the Bold and the Curve 8900 drop around $50, and this, along with other carrier promotions, have helped sales tremendously.

Last quarter, RIM managed to beat expectations with sales increasing 84 percent to $3.46 billion compared to the same period a year ago. But gross margin was down to 40 percent from 51.4 percent a year ago, and 45.6 percent sequentially.

The issue therefore, is margins. By reducing device prices, you can increase sales, but profit margins are becoming increasingly slim in this environment.

The BlackBerry Bold costs around $169.41 to manufacture but this price does not include IP and a variety of other costs the carrier needs to pay. This means margins must be tight if AT&T sells the Bold for $199.99. By comparison, the BlackBerry Storm 9530 which carries a combined materials and manufacturing cost of $202.89, sells for $49.99 on Amazon.

RIM has a brilliant team of economists on board so while I’m sure they have assured the profitability of these devices, one can only hope that price wars don’t drive down profits enough to affect R&D and device improvements.



Introductory smartphone market and BlackBerry devices



The line between consumer and enterprise is blurred and many of what RIM has been doing in recent years, reflects a shift in their market. RIM is now selling BlackBerry devices to consumers and enterprise alike. Now, 70 percent of new users are considered a consumer, and overall, consumers make up half of RIM’s user base.

The BlackBerry Pearl is the ultimate introductory smartphone and RIM will be continuing with the series as long as there are still users who have not been converted to the smartphone realm. The BlackBerry Pearl and Pearl Flip are the beginning of this introductory smartphone device roadmap, with a 3G BlackBerry in the pipes already. Although the Flip sold significantly less than other BlackBerry models such as the Curve 83xx, it is still in its infancy, and the device had enough demand to merit making the form factor.

In the coming years we will see more introductory smartphones from RIM to fill the many niches in the market. You will never love every device you see from RIM, but there will always be a device for you.

Here are some introductory devices you may or may not see from RIM:

  • 3G BlackBerry Pearl (unofficially confirmed)
  • BlackBerry Pearl Slider (we have seen the patents)
  • BlackBerry Pearl Touch (RIM is on a streak of combining devices Pearl + Storm)

Personally, I would like to see the conversion rates of BlackBerry Pearl users who move up the smartphone chain to purchase either a Curve or a Bold. I suspect the Pearl does wonders for convincing users of the joys of smartphone ownership.


Rogers survey data of Canadian smartphone users


BlackBerry Bold smartphone

Rogers has done some research regarding Canadian habits with respect to smartphone application consumption. The survey was conducted by Canadian research firm Ipsos-Reid and found a couple interesting stats regarding smartphone user downloading habits.

The data found that the average smartphone user has downloaded 19 apps in the past year. One of the first questions I would like to know is, “how many of those apps were free?” Users are downloading more apps than ever, but we still have a ways to go to convince the average smartphone user that apps are worth what developers are asking. Try convincing a first time smartphone user to pay $39.95 for IM+ All-in-One Messenger.

The survey also found that one in four of Canadian smartphone users, downloaded an app from an app store. This data brings to light an obvious fact that when the content is placed in front of the user’s eyes, they are very likely to try something out. As smartphone users get more comfortable with the purchasing process, we’ll see a greater adoption of smartphone content.

Although this data is only a glimpse at a host of theories and discussion surrounding smartphone user habits, we can see that things are moving in the right direction.


Hackers paid $10k to hack BlackBerry with no success



CanSecWest. a conference focused on infosecurity, is offering $10,000 for each and every successful attack they can execute on any of the five major smartphone operating systems: BlackBerry, Android, iPhone, Nokia/Symbian and Windows Mobile.

The companies behind these products are helping pay the hackers (developers?) with the hopes of learning more about how to improve their device security. Some hackers are finding it very difficulty to hack the devices. “I can’t break them…I don’t have anything for the iPhone, and I don’t know enough about Google,” says Charlie Miller, a guy who recently hacked a MacBook in less than 10 seconds.

So it seems your personal data is much safer than you may have thought.


[Al Sacco CIO Via]