Research In
Motion, better known as RIM, is the Canadian firm behind the iconic BlackBerry device,
much loved by mobile execs and hyperactive small business people.
As part of
a European press charm offensive by RIM, The
UK Mobile Report was the only UK title to visit the RIM HQ in Waterloo, Ontario to look behind the scenes of
the company’s seemingly unstoppable success story.
RIM laid on a walking tour of its main production facility which is responsible
for manufacturing 50,000 devices per year; a visit to the Perimeter
Institute, an academic hothouse for theoretical physicists that has received a
$100m grant from RIM co-CEO Mike Lazaridis. And finally, interviews with Lazardis, who incidentally owns 6 percent of this $15bn company.
But first
the context
As I flew
to Canada RIM was briefing analysts on its latest quarter results. By the time
I had got to my hotel, the analysts' verdict was buzzing round the airwaves and
RIM’s share price had shot up an incredible 20 per cent.
The main
cause of this rise appears to be the overall upbeat verdict on RIM’s new smartphone, the Pearl 8100. The launch of the Pearl may be seen as firing the starting
gun on a whole new chapter in the company’s history.
The tech
press have broadly given the thumbs up to the new device which brings
BlackBerry-like facilities to higher-spending consumers, or as some hacks call
them ‘prosumers’
I shall do
a full review of the Pearl in a day or so. But my own verdict
so far is that it looks good, is impressively light, and has a good battery life.
It’s also nice to have a camera and the ability to listen to music on a
Blackberry device.
The
downside. I’m not yet convinced by SureType, RIM’s untuitive typing software,
and like many other existing BB users I prefer the old trackwheel and larger keyboard.
But, hey, you can’t have it all.
The Pearl is expected to cost from free to £119 in the UK if you are signing a new contract,
so it won’t break the bank. Mobile email will cost an extra £15 or so.
Will the Pearl matter?
Most
certainly yes. It takes RIM out of the limited mobile email PDA market (700,000
units worldwide per quarter) into the smartphone market (70m units per
quarter). Clearly it is up against big hitters like Nokia and Motorola with
scores of phones available, but it doesn’t appear to be phased when it is
coming from huge strength in its own niche of mobile email.
But mobile
users are fussy folk, and RIM will have to satisfy some pretty demanding
corporate customers if it wants the Pearlto fly.
Top gripes
from businesses are currently lack of integrated Wi-Fi and 3G, and an
inconveniently placed microSD slot. Gripes from presumes meanwhile are slow loading
multimedia, lack of media controls on the phone, no video record facility, and
lack of trackwheel.
For the
moment we will have to see how well it sells. RIM is hinting that it is already
selling well in the US but that is more likely to be
optimism than hard data due to the fact it has only just become available there
in a few locations.
But RIM
remains something of a curious beast in the mobile jungle. It makes phones, it
provides software for the mobile email service (notably its BlackBerry
Enterprise Server); it licenses its platform under its Connect Service. Over
the years it must have got tired of listening to analysts telling it to focus on
one part of the business and outsource the rest.
But it is
stoically sticking to its strategy which remains largely unchanged for ten
years – to be the leaders of mobile email with fingers in most parts of the
business and working closely with operators to make BB and BES the gold
standard.
It
steadfastly rejects any claims that it should be more ‘open’ or that it should
manufacture in Asia, or that it will be annihilated in the smartphone market.
How huge will this mobile email thing be?
And it is
hard not to feel positive about the outlook for the company. Depending on which
crystal ball gazer you believe, the mobile email market is either growing fast
or very, very fast. IDC predicts that subscribers will grow from 7.3m units last year
to 63m by 2010. Even if RIM loses a bit of market share it could well achieve
50m subscribers if it remains the solution of choice.
Perhaps most concerning is that RIM became a success by ignoring its critics, now
that it is much larger, it has less critics, and is less radical.
“In the
early days, we were embarrassed to use our BlackBerries because very few
people believed in it as an idea,” says
Mark Guibert, VP, Corporate Marketing, “but we never lost confidence.”
Guibert
refers to the fact that when it was launched in 1984 no-one thought email was
that time sensitive or that it was needed ‘on the move’. How things change. RIM
now identifies different types of hard core users. There are the ‘inbox
detoxers’ who use their BBs to spend time deleting mail in spare moments; and
the ‘email skimmers’ who use their devices to manage email and send urgent mail
onto other addresses for later action.
There is little doubt that there are
thousands if not millions of BB addicts, who swear by the benefits of being
able to check email almost every minute of the day. The big question now is
whether RIM and the operators can persuade the mass market to get the executive
habit.Side note: RIM has to do this
while ensuring that their executive users don’t feel miffed to see Joe Public
becoming BB lovers – to date it has been something of a status symbol to have a
BlackBerry. Presumably the new look
Pearl will help differentiate the old
school from the new school. But if the Pearlgets a ‘sexy’ ‘must have’ tag it
won’t be long before execs want one too.
OK enough for now. I am off to
interview Mike Lazaradis, so more on that later.
Tourist notes: Go see the Mennonites
And finally some travel notes on
this part ofCanada:
Waterloo is twinned with and two miles from Kitchener where we are staying. The highlight
of the Kitchener year is the Octoberfest, Canada’s answer to the Munich Beer Fest,
which kicks off this Friday.
Kitchener was formerly called Berlin as a result of the high number of German
immigrants. But these days interest in retaining a sense of German-ness is
waning among 2nd and 3rd generation germans is waning due
to ambivalence over being identified as German.
One exception is perhaps the Mennonite
community, Kithener's answer to the Amish community. Like the Amish they shun
technology, travel in horse-drawn carriages, and generally dress in variations of turn-of-the-centrury rural chic. The Mennonites survive largely on farming and sell their produce
weekly at their own market in Kitchener. Didn't they have a hit record in the 1960s though?
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