What next for BlackBerry?

27 Jan 2012

Once upon a time, in a land far, far away, only people in neatly pressed suits used BlackBerries. It was an enterprise thing, with security and compliance first. Apps? How about SAP and their big announcement that they would be opening up their back end to the BlackBerry Enterprise Server? That was the kind of app that the suits were interested in, and the BlackBerry flourished in the concrete jungles of Wall Street and other big cities.

Meanwhile, mortals across the oceans were hearing of this exciting new-fangled concept called pushmail from their colleagues in North America.

Then someone had this great idea: Why not take the BES and let telcos run it as a service? The result was the BlackBerry Internet Service. What started off as a simplified, dumbed-down version of BlackBerry Enterprise Server for the unwashed masses soon became a shooting star, lighting up the night sky. People were hooked on their pushmail, crackberry addicts spread the world over, inspired by movies such as The Devil Wears Prada, and the rest is history.

BIS’ unique selling point in a 2.5G world was compression and speed due to the heavy lifting on the server side. Taking care of the mail in big data centres and only delivering messages highly compressed through a narrow pipe was what RIM was good at. That, and security, as the encrypted nature meant that nobody could intercept and read messages. That is, unless you are a government who demands a back door to monitor your citizens.

Only a few years ago, unlimited data plans were priced just beyond the reach of many who were not quite sure if they needed it. It was a time when many people had iPhones with data turned off, still on a timed per-minute data plan. Always on was a luxury many did not want.

BIS, through its proprietary pipe that was to its own servers and not the open internet, changed that. It allowed telcos to create a new product with unlimited BlackBerry messaging but metered internet. That proved very popular and helped fuel the rise of the BlackBerry in developing markets.

The only real competition was Microsoft Windows Mobile and its convoluted ActiveSync based pushmail solution. For a time, businessfolk wanted pushmail, none of the regional telcos had heard of BlackBerry Internet Service yet and Microsoft was trying to say, “Hello, we’ve got pushmail right here.” Not that anyone noticed them.

But fast forward to today and 3G has changed the game. On the one hand, speed and capacity means it is now feasible to run a full email client on a mobile device without the server side housekeeping and compression that made BIS so much better over 2G.

On the other hand, price competition means that Telcos now offer unlimited data plans at much lower prices

How low? For example, Only a couple years ago, DTAC in Thailand was charging 999 baht a month ($32) for unlimited data. Today, they charge 650 baht or about $20. So where does that leave BlackBerry plans? Unfortunately, in the very low ARPU sector which is not where RIM wants to be.

DTAC has an unlimited BlackBerry plan without the open internet but including social networking apps at just 150 baht or $4.80 per month. That kind of ARPU is a number that is making headlines for all the wrong reasons. It is not the image that RIM wants; of its phones being a cheaper, more economical alternative than Android or iPhone to run.

But it is a price point that is feasible and economical to run because of the BlackBerry architecture.

The enterprise is also no longer their stronghold as most organisations have decided that browser based apps, often with a liberal bring your own device policy and a layer of added security, is the way forward.

So where does that leave BlackBerry? Perhaps if Oracle, Microsoft and Apple end up taxing and destroying Android through litigation, QNX could emerge a viable option for a post-Android world. But how many people are betting on that actually happening? It will be interesting in the next few months to see the new direction that this once stellar performer will take.

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