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Black Clouds for BlackBerry?

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19th October 2009

 RIM Revenues On the face of it, the BlackBerry brand is booming. Research in Motion (RIM), who are the company behind the ubiquitous messaging devices have enjoyed phenomenal growth in terms of both sales and profits, even during the current economic downturn. When you look at the financial figures, it would seem that RIM can do no wrong.

But technology companies such as RIM live and die by the quality of their offerings, and it's vital to come up with fresh new products on a regular basis. But in Europe, there have been exactly two new product announcements from RIM since the start of 2009 - the portentously named BlackBerry Storm2 and the BlackBerry Curve 8520. And neither of these handsets offers anything particularly new - in fact, the Storm2 is more-or-less a bugfix of the original Storm launched late last year.

Of course, you don't have to launch a massive variety of new phones every year to get ahead. Apple have done very well out of a single new iPhone every year. But then Apple are way ahead of the competition when it comes to marketing interesting applications, usability and even just plain old coolness.

Research in Motion isn't a mainstream phone maker, it only makes messaging devices which by their nature tend to be fairly high-end. Perhaps the closest competitor to RIM is Taiwan's HTC which makes broadly similar devices and has also enjoyed rapid growth. HTC have announced over a dozen varied handset designs this year, easily giving a greater choice than RIM.

If you compare HTC's flagship HD2 handset with RIM's flagship BlackBerry Storm2, then the HD2 is easily a generation ahead of the Storm2 when it comes to hardware.. and HTC are at least as good as RIM when it comes to software. And all the time, HTC are improving the technical specification of their devices and branching out into new markets (such as Android) when RIM seems to be standing still.

Every handset manufacturer these days has some sort of messaging device, often one very similar in looks to a classic BlackBerry. RIM has certainly lost its unique edge when it comes to design, and indeed some rivals have been so much like a BlackBerry to look at that we are surprised that RIM haven't sued.

 Black Clouds for BlackBerry? In the consumer marketplace, RIM's BlackBerry products are beginning to look a little dated and are no longer top of their class. But RIM's cash cow in the past has always been corporate customers who care less about raw features and more about usability. But here too, RIM are in trouble with intense competition from Microsoft who are pushing their ActiveSync push email technology very hard. Although many customers are fully committed to the BlackBerry Enterprise Solution, there seems to be a significant drift to Microsoft who offer an arguably simpler solution and access to a very wide variety of Windows and non-Windows smartphones.

RIM is also stuck with its own proprietary OS, which must significantly slow down handset development. There were rumours for several years that RIM might switch the BlackBerry OS to Symbian, but even Nokia are moving away from that now with the Maemo-based N900. Perhaps a Windows or Android-based platform would speed up development, but whichever way RIM choose to go, it is likely that fortune will favour the brave.

So the problem appears to be twofold - there is a significant lack of truly new products on one hand, and the competition is eating into RIM's traditional markets. And yet, RIM's sales figures are still buoyant, so why should they need to try harder?

One warning from the past is what happened to Motorola, a company that became completely fixated with the RAZR and didn't invest enough in replacement products. Now, RIM is certainly not Motorola.. but then it is not Apple either.

Right at the moment though, RIM is not in trouble and the bottom line looks good. But they would be wise to look out for the black clouds on the horizon that might signal stormy weather to come for the BlackBerry brand.

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