Monday, April 14, 2008

The BlackBerry Phenomenon

Recently it was reported that Research In Motion (RIM) announced yet another impressive financial quarter, roughly doubling both revenues and profits over the same quarter last year.

While impressive in and of itself, this quarter's results are nothing new for RIM. They seem to be making a habit of knocking the cover off the ball every quarter, quite a track record over the past number of years. How do they do it? I'll leave the financial analysis to the Wall Street folks who are more qualified than I to figure out their balance sheet, but what I would like to talk about here is their great BlackBerry line of smartphones.

Until relatively recently, BlackBerry was treated in many ways like an underdog in the mobile industry. In the early days of the emergence of smartphones Palm took most of the attention with their Treo product (in those days BlackBerry devices were often times not even counted in the market research because they did not fit neatly into the definition of a "PDA phone" that the research firms ) Although never the market leader, Microsoft's Windows Mobile has always garnered its fair share of press through the many phone manufacturers who incorporated Windows Mobile into their products. Outside of the U.S., Nokia and its line of Symbian based phones is the 800 pound gorilla. And of course the big story over the past year has been Apple with its iPhone, which it seems everyone wants to talk about.

So what about BlackBerry? I mean, they are shipping something like 10 million+ smartphones each year. For smartphones, this is an outstanding number. The last time you were at the airport or on a plane, did you notice that just about everybody is carrying a BlackBerry? I first noticed this phenomenon a couple years ago. It seemed that quietly over the past few years a huge number of people had obtained and were using a BlackBerry. I had been working with RIM products myself going back to the 1990's, but this observation finally convinced me that they were, at least by my very unscientific method, in fact the true market leader for mobile devices. How did they do it?

Its difficult to explain to somebody until they actually own a BlackBerry and start using it, but usually after just a short period of getting used to the device, people "get it". Yes, Apple may create the most stylish and beautiful products, and Microsoft phones may be jam-packed with the most features, but if you want a device that is practical and functional, BlackBerry is for my money one of the best choices around today. Granted, if you just look at it from a pure "specs" standpoint, on the surface there doesnt seem to be anything terribly special about a BlackBerry. It has a QWERTY keyboard, but so do many other smartphones these days. It doesn't offer stylus navigation or a touch screen, so in some ways it may seem like it might be less elegant and harder to use than, say, a Treo.

The designers of this product over the years have really nailed the concept of making it fast and simple to operate. I believe they've really thought through how to create a product that in many ways anticipates what its owner wants to do and the information that it needs. This is obvious to anyone who uses BlackBerry for email. You don't have to "check your email". Your email is simply there waiting for you, whenever you want to read it. When you compose a message, it has an uncanny ability to locate the addressee you want in just a couple of keystrokes. Its worth going through a comparison of composing an email on a BlackBerry vs. on other devices, the difference is very significant. Years of refining and tweaking its messaging service for its corporate customers has clearly paid off for RIM.

Compared with the Palm and Windows platforms that preceded it in the marketplace, RIM has been relatively slow out of the gate in terms of embracing and supporting third party applications. Applications must be written in Java, and to provide a full BlackBerry experience in your app requires you to develop specifically with BlackBerry in mind, so those have been hurdles for developers to get over. That said, it is hard to ignore the success that RIM has had, and their customer base represents an extremely attractive target market for application developers. There are some excellent third party apps out there, but more need to be available, there are many categories where there is a need for professional quality apps.

I've been carrying a BlackBerry 8800 (AT&T) now for a while, its an excellent product and I am very pleased with it. In particular the GPS feature is surprisingly addictive - I use Google Maps all the time. I wish the calendar function was a little more powerful, and like most mobile devices the web browser experience is still fairly poor, but overall this is another wonderful product from RIM.

It will be fascinating to watch how the competitive landscape unfolds over the next year. RIM has a very strong position and continues to churn out great products, apparently quite profitably. But the pressure on them to continue their winning streak is enormous, and the competition from Apple, Microsoft and others will continue to seek to chip away at their market position.

I'll be at RIM's worldwide tradeshow WES (www.attendwes.com) in a couple of weeks, I've been to WES each of the last several years and its always been a great show. If you are going, drop me a line at glenn@bachmannsoftware.com!

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