I’ve been thinking a lot lately about the smartphone space. It’s the most exciting space in tech today, and there are fantastic combinations of technology, brand and personalities. Add to that the massive value of this market and you have a mega-spectacle.
RIM was not too long ago the undisputed leader in the smartphone market. It was omnipresent in business and on prime-time TV and movies. We even saw as recently as 2008 the newly elected President of the United States pushing very hard to keep his BlackBerry. Epic stuff.
But much has changed. The iPhone really did change everything. This isn’t marketing hype, although I’m sure many at RIM point to Apple’s excellence at marketing as the reason for their current challenges. But that is selling Apple short. Apple really focused on the smartphone ecosystem, and the end-user experience. Historically, they have been absolute leaders in user experience. “Insanely great” would be a lame marketing gimmick if it were not backed by ground breaking product innovation.
The smartphone ecosystem is defined by the handset, the OS, the development environment and the online store. Apple’s approach, which has once again recently been attacked by RIM, is the highly-controlled ‘Walled Garden’. As long as you live inside the walls, life is good. If the walls are too close together, then we revolt. If we barely perceive there being walls, then we exult.
The iPhone hardware is clearly obsessed over by Apple inside and out. But the primary criticism of the iPhone is the quality of the pure phone features. The iPhone 4 is reportedly dropping more calls than the iPhone 3G/3GS. The talents of the RIM RF engineers appears to be measurably better than those at Apple. When RIM was a young company, they recognized the critical importance of battery and packet efficiency, and have excelled in this regard to this day.
The battle between iPhone and BlackBerry has been tough, but the entry of Google and Android to this war has had a striking impact. Android is growing in the market faster than iPhone or BlackBerry. Google’s strategy of being the OS-dealer and delivering a vast platform of capabilities in a modern operating system to a large population of mobile handset providers is working. The iPhone (and the BlackBerry) are high-end, expensive devices. The Android ecosystem has a broad range of handsets that reach across the spectrum of budgets.
Google is a disruptive entrant into the smartphone market. Their end game is fundamentally different, and unique to every other participant. They don’t want to sell hardware. They don’t want to sell minutes, or bytes. They want traffic, in the form of search. Things like “what’s near me?” and “where is?” compliment the traditional “google search” traffic that Google has monetized spectacularly.
You could form a reasonable argument that eventually, the only profitable segment left in the smartphone market is the monetization of traffic. And that’s exactly where Google lives today, and is betting huge for tomorrow.
So, what would I do if I was Mike Lazaridis for a day (or perhaps a month, because these things take time)?
1) Immediately adopt Android as the operating system for the BlackBerry family of products
2) Port the BES and handset messaging (email, BBM etc) capabilities to Android, and make those available, as premium/only available on BlackBerry hardware features
3) Stop all work on PlayBook
Pretty radical? Well, not really.
1) Adopting Android accomplishes 2 major objectives. The first is eliminating a significant competitive threat. Fighting a war on 2 fronts doesn’t end well. See the Wikipedia entry on Germany/World War II. RIM is great at several things, but the operating system is not one of them. The QNX acquisition could have been useful had it been done 5+ years ago and leveraged on the BlackBerry. Introducing a new operating system is going to be disruptive to the BlackBerry developers inside and outside the company. Third party developers will have to choose. They don’t have infinite amounts of time, money and patience, so they pick the platforms that deliver the greatest returns. Ease of use, and economics run this machine. BlackBerry is losing on both points here. And a complete reset isn’t a nice thing to do to your friends.
The second major objective achieved by adopting Android is instant application (and thus developer) presence. When I picked up a new BlackBerry last year, and couldn’t find the App World on it, I was mortified. How the hell can you compete when you don’t even put the app store on the device? RIM realized very late the importance of the 3rd party developer, and the intrinsic value users place on finding and buying fun new applications. Using Android is instant street cred with a large and growing population of developers, and is a foundation to build great hardware under.
2) When you think about what RIM is really great at, 2 things come to mind. Fantastic hardware with keyboards that are brilliant to type on, and unparalleled messaging. Those things built RIM into the super-success story it is today. The “CrackBerry” was/is all about messaging. I’ve perceived what could be considered as annoyance that things like web browsing, rich media, and 3rd party application support were required to participate. RIM has not lead in this areas, it has lagged dangerously.
If we go back to first principles, and the core IP the company was built upon, we see an enduring value, and significant differentiator across every other participant in the market. Take their excellence in messaging, and bring it into Android as a “BlackBerry-only” capability. You want to differentiate your Motorola or HTC Android phone with the BlackBerry? Oh, yeah, you have BlackBerry capability on top of Android. That will close deals. And having Google as a partner is a pretty potent combination.
3) The PlayBook was announced very early, and upon reflection, awkwardly. I love the vision, and think the capabilities described are compelling. But I don’t understand who really wants it, and it this has nothing to do with RIM’s core competency. They are not a consumer electronics company. And they’re entering a market that will quickly be saturated with major consumer electronics players. And a huge number of them will be running…you guessed it, Android. RIM is a large enterprise, but it’s not so large that they can afford to deflect the best and brightest resources off to this new venture. The PlayBook will have Flash. That’s great, but Android also has Flash. So much for that as a differentiator. If RIM adopted Android, then maybe there’s a play for an Enterprise tablet, but I’d still think very carefully about that before taking any of my ‘A’ players off of BlackBerry roadmap work.
Don’t make the already overburdened and loyal BlackBerry developers have to build or port his apps to another hardware form factor and operating system. Show the developers some love, and they will repay you by making your platform do things you never imagined it could or would. But you have to see them as valuable as your own developers, not as a remote contingent that will be happy with whatever you give them.
I can’t sing the praises of Android without voicing a major concern I have with it. The complete punting by Google on the quality, and most importantly, the security of Google Android Marketplace applications is a massive timebomb that will eventually go off. Apple has taken plenty of stick for being slow, onerous and at times obstinant about what Apps they approve for their App Store. But Google has taken a ‘the community will decide’ approach. That may work at the macro level, but would you like to be one of the first few hundred consumers to mistakenly downloaded a fake Citibank Home Banking application? I wouldn’t.
One other thing. That company in Redmond. They should have bought RIM a while ago. It’s cheaper now, and maybe they still should. I think that would be a shame for RIM, and a smart move for Microsoft. They are in a much worse position in the smartphone market. RIM has great IP that fits like a glove in the Exchange/Enterprise ecosystem, and would give Microsoft a desperately needed leap-ahead in the market.
But if RIM gets the next few moves right, they can reclaim their position at or near the top of the heap.
I’m never going to be “Mike for a day”, and I’m cheering for RIM. They’ve been a source of local and national pride for years, and I have lots of smart friends working there. On a recent flight to Montreal, I met a businessman from New Zealand and when I introduced myself I said “I’m from Waterloo, where the BlackBerry was invented”. I have the privilege of being able to speak to lots of smart people everywhere about this space. And after lots of discussion and lots of thoughts, these are the conclusions I’ve reached.
So that’s what I would do. What would you do?