Monday, February 04, 2008

The BlackBerry is jam

As in a fruit squished between the iPhone and Windows Mobile, then spread on toast.

I'm surprised the BlackBerry lasted this long, the old Microsoft would have squished RIM eons ago. Now though, the day of reckoning at hand.

I base my cruel judgment on my personal experience with the BlackBerry Pearl and my knowledge of what Microsoft is selling to large corporations.

First, a step back. I have known for years that the BlackBerry is a terrific Microsoft Exchange peripheral. Nobody I knew, however, could explain whether it was anything more. For that I had to buy my wife the BlackBerry Pearl.

The answer is that it's very slightly more than an Exchange peripheral. Emily's Pearl has 64MB of memory available and a JVM; the combination can run several Google Apps that give it proto-Android features. You can even install ePocrates -- but then you hit the 64MB barrier hard (which I last encountered on a Commodore 64 around 1983). True, the BB can hold a 2GB memory card installed, but it can only store media - nothing useful.

Beyond the severe memory limitations, the BB's built-in applications are crude. They show none of the elegance and loving attention to excellence seen in the original Palm, the pre-multifinder Mac, or the new iPhone. The only thing that impresses in any way is the simple built-in push email app. It works, and for geezers it's an improvement over instant messaging.

Still, as a consumer device, the BB is a step up over, say, the despised Motorola RAZR. Unfortunately, it's not competing against the RAZR. It's going up against the iPhone, and there's no comparison.

So, the BB has no future on the consumer side.

What about the massive business franchise? Every executive worth their weight (not me by the way!) carries a BlackBerry and lives by it. Well, to be precise, they use email, calendar and contacts -- nothing more. Still, it works.

Except that Microsoft is now selling complete communications solutions to corporations that are built around Exchange, Sharepoint, and various messaging technologies. Microsoft's phone OS (whatever it's called today) is a major component of this package, and they'll shove it down everyone's throats. It won't be hard for Microsoft to break BlackBerry's Exchange server integration now that they're making their play for this space.

So, end of story. The BB is nowhere near good enough to compete with the iPhone on the consumer side. On the corporate side the axe is finally coming down.

RIMM's shares are doing pretty well. Maybe they could survive on patents alone. I would like to figure out how to short them though ...


Anonymous said...

Hi Gordon,

We built a service business around BlackBerry some 5 years ago and we are doing pretty well in Europe and the US. Your analysis is interesting but I would like to add to it.

Fact is that BlackBerry, despite their 'small' market cap of 50B$ still is way ahead of Microsoft in terms of usability, efficiency, security and manageability. As for the consumer market, that's not their focus so comparing Apples and BBs is not relevant (for now). In the prosumer market RIM is doing excellent by the way. So altogether, RIM has still a very strong position and has consistently been able to please their customers and partners. Many Telco's and IT companies could learn from that...

JGF said...

If only it were enough to delivery excellent value to customers!

The BlackBerry is an excellent Exchange peripheral, but there have been lots of excellent products that Microsoft has crushed.

I think expanding into the consumer/prosumer market was strategically important for them, but Apple has closed that exit. The gaps are too wide for them to bridge.

So that leaves Microsoft. I don't fully understand why they've let BB live this long, but they control the entire ecosystem that BB lives in. Their new corporate communications initiatives are like a giant development, and BB is the quaint neighborhood in the way of the wrecking machine.

I dislike most of Microsoft's products (Excel and Windows Live Writer are the major exceptions) so I take no joy in BB jam. If I turn out to be wrong that will mean Microsoft has really been broken, and that will be something to celebrate.