Blackberry Meltdown Coming Soon - Five Reasons RIM Popularity Will Peak This Year
Posted on 25 April 2008, at 6:20 am, by Wayne Schulz
This morning, as I’m reading news that the 3G Blackberry may be delayed so as not to collide with the 3G iPhone launch, I became convinced that Blackberry’s lengthy run atop the food chain of corporate mobile devices is ending. Why would I think that? Here’s 5 reasons that Blackberry device usage will peak in 2008 never to return to these heights again
I have several reasons for believing that the Blackberry “Cinderella Story” is going to gradually skid to a halt.
The major downside to Blackberry use is that many casual users don’t realize that to activate a Blackberry you must choose two cellular service plans — one voice plan plus a mandatory pricey Blackberry plan (and , yes, people do report being able to bypass the second restriction but the usability of the device is severely limited).
Some of you are saying that corporations don’t care about such expenses and just pay the bill in exchange for solid service. Maybe. But has anyone noticed we’re in the midst of a recession? Also each RIM press release touts the rapid growth that is coming from their consumer devices - NOT the corporate.
From the latest RIM Earnings Report as reported in the Financial Post on April 4, 2008:
During Wednesday’s conference call, co-chief executive Jim Balsillie mentioned how more than half of the new BlackBerry subscribers came from “non-enterprise” sectors, helped in part by a number of consumer-friendly offerings. RIM expects that lucrative subscriber base to grow past its current rate of 38% of total users with next quarter’s subscription base growth of 2.2 million customers.
“Consumer sales continue to move higher given the significant retail programs and national ad campaigns that are taking place,” said National Bank Financial analyst Deepak Chopra. “RIM indicated that this is expected to continue.”
Consumers DO care a lot about cost. Which is why the following 5 issues will, I believe, lead to a slowdown in RIM Blackberry market share.
Reason #1: I’m Seriously Thinking Of Junking My Blackberry and Going iPhone Only
This by itself doesn’t predict anything. Heck, I rarely use any phone longer than 6 months. But my Blackberry device has been on my hip since 1990. For 18 years this has been my main email, calendar, task and contact management.
The Blackberry allure started to fade in January when I bought up an iPhone - more out of curiosity than any desire to replace my Blackberry 8320.
That’s when I discovered reason #2 that people will ditch Blackberries.
Reason #2: The Browser Sucks
In the 18 year of using a Blackberry, the only resolution to this cruddy browser have been the suggestions to “use Opera”.
I’ve tried Opera and I guess it’s ok - but why shouldn’t RIM have a beefed up web browser by now. Sadly I don’t think much is going to change in “browser land” with the next iteration of the Blackberry. At least if something is on tap, nobody’s talking or demonstrating it.
It’s unbelievable, and almost negligent, that RIM have failed to improve their browser. Haven’t they watched the marketplace and the move to web based applications?
Reason #3: Push Email is No Longer A Mystery
I cancelled my BES (Blackberry Enterprise Server) about 6 months ago and went 100% with Google Mail and a less expensive ($19) Blackberry Internet Service. This pushes email out instantly to my 8320.
The Google imap setup was automatic. I receive Google Mail on my iPhone as well, it’s not instant but I’m betting it will be once iPhone attacks the corporate market. Once the corporate users get a look at free push email - the decision about whether to continue paying $40/user for BES connections or move to free push mail on an iPhone (or similar) is going to be easy to make.
Reason #4: BES is No Longer Needed To Sync: Calendar, Tasks, Contacts
RIM makes a lot of profit by selling additional plans to those using Blackberry’s. For anyone who purchased a Blackberry you’ll now what I’m talking about. To receive service via Blackberry requires a monthly cell phone plan PLUS a mandatory Blackberry data plan (pricing starts at an additional $19 per month for Blackberry Internet Service and $39 per month for the corporate Blackberry Enterprise Service)
Look what is already available for free that bypasses the need for the more expensive corporate BES service (which used to cost me an additional $40 on top of my $60 voice plan).
My point here? If these are available for the Blackberry - how long do you think it will take for them to reach the iPhone? At the point where they reach the iPhone - how many people will want to keep paying that monthly Blackberry specific service fee?
Tip: Free Blackberry Services That I Use To Avoid Paying RIM $40 for their more expensive BES (Blackberry Entrprise Service) - instead I save 50% and pay only $19 for the BIS (Blackberry Internet Service)
Push Email: Google iMap pushes direct to the Blackberry - soon I predict it will do other devices as well
Calendar Sync: Google Mobile
Task Sync: RememberTheMilk - MilkSync for Blackberry
Contacts Sync: This part isn’t yet available for the Blackberry - but look what Spanning Sync has for the Mac and it’s not hard to see that with the Google Contacts API made available to developers that other versions will follow.
Reason # 5: Third Party Applications Are Sparse (but getting better) and the broad market acceptance of the iPhone will gnaw away at the will of new developers to specialize in Blackberry
Blackberry’s strong suit has never been third party applications. This is starting to change and more developers are writing for Blackberry. Once the iPhone developers release cool third party applications and dwarf the sparse number available for the Blackberry, I predict you’ll see a lot of users making a switch.
These reasons by themselves don’t mean that Blackberrys are going away tomorrow. I do think that taken together they point to an interesting possible scenario of declining Blackberry popularity.
All of the reasons that I’ve carried a Blackberry for 18 years are suddenly disappearing. I think these trends are going to continue for the rest of 2008. With the introduction of the iPhone 3G combined with third party iPhone development - the Blackberry will never see the lofty heights (financial and popularity) that it enjoys today.
April 25th, 2008 at 8:05 am
I just thought of a 6th reason that the RIM Blackberry ride will slowly end (notice I’m not predicting that it stops or collapses - just that it won’t regain this popularity again)
Lack of HTML email….
I mean - please. I know it may be tough to do but for us to rely on third party apps to do basic html email is painful.
My preference is text email — which is why I didn’t think of this missing feature earlier. But I think it’s an important and glaring Blackberry omission.
April 25th, 2008 at 8:19 am
Wayne,
Great write up and all valid points to be made, but would you consider this post to focus on the consumer world or the business world, because one is drastically different from the other in several ways. Also a little side note, its not that the 3G Berry has been pushed back, I don’t believe AT&T planned on releasing theirs till the 3rd Quarter anyways and of course with the 3G iPhone that does make sense.
T
April 25th, 2008 at 8:26 am
Hey TT - I modified the top of this post based on some great feedback someone gave me via Twitter — they pointed out that corporate users won’t be fast to abandon this.
In the last earnings call (April 4ish) - RIM pointed out that over 1/2 of their growth comes from consumers.
This area of growth, imho, is highly vulnerable to attack by the 3G iPhone.
Hard to tell if any of the iPhone launch delays are true or not since Apple is so secretive.
Seeing the articles surface this morning about the delays set my mind in motion. I’ve been wanting to write this for about two weeks.
Overall if as an 18 year user of Blackberry I’m seriously thinking of abandoning it for the iphone because of better iPhone browser and equal push mail, calendar, contacts (not there yet) — then I’m making the assumption that a lot of other users may as well.
We’ll have to see — but I’d be willing to bet that RIM won’t see market share this high ever again.
April 25th, 2008 at 8:39 am
I don’t get it? The big thing RIM has on iphone is a keyboard. How can you realistically reply to email in a substantial way on an iphone?
That being said, other than having an equally crappy browser, The TREO has HTML email, push mail, boatloads of 3rd party apps, push mail etc. COupled with Sprint’s very genererous, fast and affordable data plans, why would anybody pay double/month for blackberry for what they can get on a Treo (which also lets you tether 3g to a laptop for free?
I guess because it isn’t a brain dead setup so the masses are willing to pay for the simplicity.
April 25th, 2008 at 8:44 am
The keyboard is one reason that Blackberry’s will stay popular - just never as popular (market share wise) as they are today.
Sprint actually has a really good deal for anyone who buys a Blackberry under their $99 per month unlimited Simply Everything Plan — their BIS service is included at no additional cost.
Problems that will start to appear once all these apps for iPhone are released is that other platforms will stagnate — both Palm and Blackberry are sure to lose developers.
Hey Mark I could be wrong — and you should definitely know because I think for a solid month I messaged you about how awful the iPhone was and would never take off — and here I am thinking of adopting it as my full time business phone…:-)
April 25th, 2008 at 8:54 am
Hi Wayne,
I agree that Blackberry is at it’s peak. I believe that Windows Mobile will gradually take over the corporate sector based on cost savings and Microsoft integration of products. I also believe that many consumers that can afford to will move to the iPhone. I will never use an iPhone because it doesn’t give me all of the business capabilities that I need and I imagine there are many more like me that need more options than what the iPhone provides. It is a very innovative product but too proprietary and heavily integrated with iTunes. The corporate sector will never adopt the iPhone as an enterprise device based on poor security control. It will be interesting to see where all of these players will be in about 3-5 years. My bet is that Windows Mobile will have the largest market share and Android will be a big player as well (competing with iPhone at the consumer level). Blackberry will always be there because organizations have invested way too much money in the hardware and software to just walk away from it.
April 25th, 2008 at 9:01 am
I agree with you that the 3G iPhone will make things more interesting in the very near future for consumers, but am not quite sold on it from a business standpoint just yet, granted I will break down and say I have had an iPhone for the last 3 months, testing and writing apps with the SDK to see what can be used from a business use scenario. Now with that being said, the one thing the iPhone needs in the business is Exchange which only takes up about 56% of email in the business world, the other being Lotus Notes and Groupwise.
The other thing on the iPhone I am not sold on more then anything else is the keyboard, granted over time you can get used to it, but my thumbs are going into shock not being used that much on the device
Again, I agree that there is a huge wait and see at this point to see what direction Apple and RIM go in. And we can also throw in Android for good measure to see what type of hysteria that is going to cause.
I will be going to WES 2008 this year, so maybe, just maybe, RIM has something up their sleeves we havent seen yet, who knows.
April 25th, 2008 at 5:01 pm
I haven’t used the keyboard extensively on my iPod Touch, but I can certainly say I am faster typing on my BlackJack II’s hardware thumboard as opposed to the OSK.
That is where the Blackberry has the iPhone beat, the hardware keyboard is just better and more familiar in my opinion. Still, I agree with you RIM are going to struggle to hold onto customer with higher prices than competitors. Windows Mobile will also be devouring a piece of the RIM pie, with Exchange usage growing and cheaper devices that don’t have to have an expensive add-on just for syncing.
Reliability may also come into the equation for RIM. With their outages recently some may consider jumping ship to other platforms, and new users may steer clear.
April 25th, 2008 at 6:06 pm
Its funny - I’m actually FASTER typing on my iPhone than I was on my Treo. I think it ’s because the keys are the Treo are so small. The iPhone adaptive typing helps a LOT!
I think Wayne is right and BB has reached a peak, but I think part of it is because of the poor reliability and performance track record they have had in recent months. Even this morning there was another outage where I, on my iPhone, was the only one receiving alerts from our internal systems. All the BB users were getting no mail again.
Eventually people will be concerned about the lack of reliability and redundancy in the BB system and that will cause businesses to question the value of the service as well.
April 26th, 2008 at 5:22 am
The hit will be the Blackberry business model. They are selling device, server and services. If their device business affected, the sell of server and services will drop also.
I am working in a law firm. A lot of users (attorneys) asked the IT whether they can use the iPhone instead of Blackberry. IT told the users the keyboard of iPhone is not as good as Blackberry. Most of them showed no concern about the keyboard. They told the IT most of the time they only read email. For composing a short email, they think iPhone is acceptable. (For composing a long email with attachments, it is impossible to do it by using any mobile device.) The main concern is they want to access internet (confirmed your point of not having a good web browser). They also do not want to carry two devices, that is BB and iPod.
April 26th, 2008 at 6:41 am
Many corps are switching to MS Exchange push regarless of the device and freezing the BB users in terms of new growth.. Also seeing growth in the GoodMail arena too..
April 26th, 2008 at 10:29 am
Like other things on the iPhone, I think the keyboard will be a non issue because someone will figure a way to type on the iphone in Landscape view. I downloaded one of those web apps that are similar to Mavis Beacon’s Typing Tutor and type just as fast on the iphone as I did on the Treo. Windows Mobile is SO clunky, and their browser quite simple sucks. Yes, they could improve that but if a phone requires a stylus at any point I will pass that phone by
May 3rd, 2008 at 1:36 pm
With all due respect, I would like to know how you have had a BlackBerry device on your hip since 1990, when the first RIM device wasn’t released until 1995/96 (Inter@ctive Pager). It wasn’t until 1998 when the first BlackBerry branded device was released.
The browser is being drastically improved as well. The new information about OS 4.6 shows screen shots of the actual browser, and it uses a scroll and zoom style much like the iPhone.
Data plans are a requirement of ALL PDA devices, even the iPhone. It uses At&t’s basic MEdia Net system however, so it is only $20, but it’s still an additional cost, and unlike the BlackBerry, you can’t create an iPhone line without it. You are also overlooking the differences between BES and BIS. BES allows for remote control of all devices on the network, as well as a far more secure system when compared to free services like Google Sync and the likes. For example, if a worker’s device is lost and ends up in the wrong hands, the BES admins can simply do a remote device wipe and all the confidential information on the device is gone.
If you told my company to drop their BES and swap all the employees to iPhones with Exchange, they would laugh at you. Like I said, there is more to BES than two way, wireless sync, and the loss of security alone would be more than enough for my company to scoff at the idea.
Your third party apps comment is one I don’t understand either. Go to Handango or Mobihand and set your device as a BlackBerry, then look for all available third party apps. It will return over 2,000 apps. How is that sparse? What exactly do you need that isn’t available, and how many apps can you realistically utilize on your phone? I have been using BlackBerrys for quite some time, and I have never had more than 10-15 3rd party apps installed at the same time, nor have I ever had a problem finding an app to do what I want. Having a lot of third party apps doesn’t mean you will always have a lot of good ones. Remember, quantity over quality is not a good way to live.
You also fail to mention the concept of how strict Apple is being about the upcoming 3rd party apps for its iPhone. They require all apps to be signed by them, and are only allowing distribution through iTunes. They are also restricting all apps to run in a single tasking environment. The latest rumor is that they may allow some multi-tasking, but it will be minimal at best. At least on my BlackBerry I can have all 15 of my apps running at the same time if I so choose, and I can freely (and easily) swap between them. I would never do this because of system stability, but the fact remains that it is MY choice if I want to or not. Apple is making the choice for you, and that can be a recipe for disaster.
I love the iPhone for what it is, I really do, but it is by no means ready to wipe RIM out, especially in the corporate sector. I am not trying to argue, but I do think your comments and “reasons” are a bit short sighted.
May 3rd, 2008 at 3:06 pm
My first BB was the off-brand Inter@Active Pager:
http://www.flickr.com/photos/mas90guru/2269051938/
I may be off on the years (I could swear that I located info online when this device was first released and used that as my basis for stating when I started using the BB — I’ve had one ever since they were available - every model - or variation)
With respect to the required data plans, you’re right. You need to use a plan with other PDA phones as well. I see having to buy a RIM specific one which is more expensive and an additional point of failure as a downside.
As for the whole issue of replacing Blackberries with iPhones — you’re right again — my feel is that this is going to change pretty quickly as the iPhone enters the corporate market with promised Exchange features (I believe one announced feature was to disable phones remotely). I’m making a few leaps of faith (which perhaps I shouldn’t) that Apple will execute and build into their next iPhone OS all the tools needed to make the phone corporate friendly.
I’m disappointed by the lack of cool apps like the Slingbox player lak (in beta but as of yet unreleased) as well as the dog slow speed on my T-Mo 8320 browser and the lack of html email (and early reports are that it still may be delayed in future OS releases).
You make a lot of excellent points and present an very good opposing viewpoint to this article.
Thanks for making such a well thought out comment on this topic.
May 8th, 2008 at 8:19 am
There are 3 things holding the iPhone back for most powerusers in my opinion:
1. No physical keyboard.
2. No CDMA version. Yes, this mostly affects US users. But, I know quite a few people that would consider trying an iPhone but will not leave Sprint or Verizon for what ever reason.
3. No Multi-tasking. This was the big reason for me to leave Palm for the BB.
May 22nd, 2008 at 2:04 pm
I would like to come back and change a few things. I recently took the time to watch the keynote from March, rather than going by the word floating around the web, and I have to say I am very impressed. I still don’t think that the iPhone will manage to nestle itself inside of huge corporations where RIM already has a super strong grip, but I do think they will work their way in elsewhere. Smaller companies that don’t rely on such extreme security, well, even larger companies that don’t, as well as small to medium sized local business. Basically, I now feel that an ActiveSync running iPhone will find a very comfortable place inside of any business that uses Exchange and doesn’t require the utmost in security and IT policies.
I have also heard recent rumors of Apple reducing its multitasking restrictions on third party apps, and that coupled with what I saw in that keynote, will definitely make the iPhone a wonderful third party platform.
So, I apologize for my quick to jump comments, and I while I still can’t see Apple completely removing RIM from the equation in places where it is already established (like the Government), I can see them making quite the splash in more open business environments, from small and local all the way to large and international.
May 22nd, 2008 at 2:09 pm
I do not think RIM is going to lose market share overnight, but the writing seems to be on the wall. As the iPhone gets better, more and more employees are going to want to use it as their work phone.
Just for an update, I’ve since canceled my Blackberry 8320 and now carry my iPhone as my main work phone.
I elaborated a bit more on the reasoning here:
http://www.geardiary.com/2008/.....ns-i-left/