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Thursday, April 29, 2010

Most commentators don't get RIM's strategy

I've seen a huge amount of comment over the past week about RIM supposedly being "behind the curve" on the latest version of its OS release - especially about it playing catch-up with Apple's huge developer base and app store, as well as Android's rapidly-increasing developer mindshare.

I absolutely agree that BlackBerry has suffered from a historically sub-par browser experience, and has certainly had less app support from some of the "sexier" (or more trivial) developers.

But much of the analysis I've seen has overlooked something small and exceptionally important - the reason why consumers [at least in some segments] seem to be buying BlackBerries. And, in particular, they overlook the killer app.

No, not email. BlackBerry Messenger, BBM - the evolution of PIN-to-PIN messaging.

While you can get to most social networks or messaging services on any device - Facebook, Twitter, MSN, IM and so on - BBM is unique to BlackBerries. And, perhaps surprisingly, it is becoming viral within certain groups. I certainly notice it among teenagers and students - but speaking to other people, it's also used in other widely diverse demographics. It's actually the exclusivity and silo nature of the service which *adds* value to it - completely contrary to the usual mobile industry hype about combining social networks into a single client application. I've been saying for some time that there is little rationale for combining social networks into a single interface on a mobile - and this appears to prove me right.

I've also said before that I'm unconvinced that zillions of apps are *that* important for the real massmarket of smartphone users, beyond a few must-haves like a decent Facebook client. I just don't believe that a billion people will follow in the path of the geek evangelists and load up their phone with pages of application jewellery.

I use just 5 apps on my personal iPhone, 3 of which are things like RSS that ought to be have been in the device OS to begin with anyway. I have no particular interest in looking for other ones, unless I have a very specific urgent need. The browser (and to a degree, browser-resident apps) is a different story - I think it will be pretty essential for far more users than a long tail of native apps.

So the decision for some customers is "Do I want a fully-loaded appstore, at the risk of missing out on the gossip from my friends on BBM?". Quite a lot of younger users are going for the gossip approach - as well as the cheapness of devices that fit with their preference for prepaid tariffs rather than contracts, something that the other smartphone suppliers are not really yet addressing.

The problem is that for industry observers (and developers) the idea of someone preferring a basic, text-based IM client over whizzy graphics and multi-touch UIs is very hard to grasp. But unfortunately, there's precedent here - SMS has huge "social value" even if its design "elegance" and sophistication is minimal.

In fact, BBM also has the rather more disruptive aspect of replacing SMS with a sometimes-cheaper (and more exclusive) alternative. Why do you think RIM has just introduced a new version of the Pearl 3G with a normal featurephone numeric keypad, suitable for the billions of users who are happy with multi-tap entry? BBM appears to be the mobile successor to MSN as the default messaging platform for a large swathe of the demographic landscape (and, anecdotally, somewhat skewed towards females as well).

Maybe the end-point will be leaving the SMS client for spam adverts and boring messages from parents or "that guy you met in the pub".... all the important and high social-value messages from friends could get siphoned off.

At the moment, I'm certainly not predicting a huge polarity switch in smartphones back from touchscreen to QWERTY, solely on the basis of BBM. But it is definitely a wildcard, especially among youth - Apple has abdicated the global 75% of users who use prepay and usually non-subsidised handsets.

So among the analyst and journalist and blogging classes, I can understand why RIM's perceived lack of "shininess" has led people to downplay its position against its peers, but I continue to believe it is a more formidable competitor than many think


Anonymous said...

I guess the problem for me w.r.t BB is the fact that the more they pursue this low end model, the more they are pushed to a low cost high volume model. Can they keep it up ? Especially with their own special network that has to be setup and maintained to allow this BBM to work ? The cost burden of that network will grow with more people using it. Especially if they don't pay the nice big fees the corporate users used to pay.

Also, while BBM is certainly going viral quickly, I think the one thing that the last 10 years in the mass adoption of Internet shows is how quickly people move on. Myspace was supposed to take over the world, Facebook overtook it in a couple of years. AOL with AIM looked unbeatable for a while.

Paul Keogh said...

Any thoughts on whether or not RIM should open the BBM protocol ? The viral growth of BBM is impressive and I guess there must be lots of discussion inside RIM as to the merits or otherwise of opening up the protocol.

Dean Bubley said...


I'd say "not yet" - it's still the Golden Goose, let's see how many eggs it will lay before opening it up.

And then I suspect RIM will want to open it very selectively - perhaps licence it to a handset vendor operating in a mostly non-competing space (LG might be a good bet), which could push BBM to lower-tier parts of the market, but keep it "under control".

Although my more disruptive side wonders if it might be more interesting to develop an iPhone client and see if Apple rejects it....

A lot depends as well on whether RIM can somehow monetise BBM above and beyond extra device sales and BIS subscriptions


Anonymous said...

Amen. I agree with BBM being a big factor in the recent increased interest among non-business users.

goyomarquez said...

I think the vision is different. Iphone is not a phone but a step on the road to a handheld computer. BB is a phone on the road to become a better phone, i.e. a commodity. When you're targeting the large segment of the market that's what you end up selling, a commodity. There isn't a great deal of margin in commodities but they do provide a reliable revenue stream.

Leapfactor said...

BBM is definitely one of the best features of BB. But is it really impossible to copy and enhance? As you suggest, it is a wildcard and RIM should use it wisely. Good stuff.

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timmyhay said...

There are 3 problems with BlackBerry for mobile operators:
1. The cost per user per month which is US$2-7 depending on size of operator and the specific service.
2. Complexity of provisioning BIS vs BIS lite vs BES services and the fact that they have different capabilities. It is very messy.
3. Complexity and cost of maintaining the dedicated links to RIM's relay infrastructure.

I agree that BBM is a great service, really the best of SMS + the best of IM, it t erodes SMS revenue.

I would say RIM's problem is how to grow this without annoying their operator partners.

It's all very complex financially and operationally for operators to handle.