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Can RIM Make a Rebound?

The company famous for the BlackBerry smartphone and the recent PlayBook tablet is trying to maintain its stronghold on small businesses.

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BlackBerry Curve 9300 smartphone

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RIM is on the ropes. The company famous for the BlackBerry smartphone and the recent PlayBook tablet announced massive layoffs in July. Recently, RIM stock (a.k.a., Research in Motion) has taken a full-frontal nose dive.

Yet, at Inc, we hear continually about small business users who swear by the BlackBerry. Some just can’t envision moving onto more fertile ground (aka, a phone with plenty of apps). There’s a familiarity in using the built-in messaging client that fetches e-mail quickly. And, some small companies have locked into the BlackBerry Enterprise Server messaging add-on.

Matt Whitteker, who runs an online transcription service called NoNotes in Ottawa, Canada, says he can’t imagine relying on any other smartphone for business. His first-gen BlackBerry Torch is reliable, the keyboard helps him type text and e-mail messages fast, and he has not had any hardware problems.

“BlackBerry enterprise email is still ahead of its competitors,” says Whitteker. “I need a keypad for business when I'm typing long emails. I think the Torch is the best in its class.”

Of course, as noted consumer analyst Michael Gartenberg told us, the Blackberry has stiff competition. In the heydey of BlackBerry messaging, the iPhone and Android devices did not exist. Now, the company is releasing a bevy of new products to essentially flood the market, he says, and re-capture the market share they have lost over the past few years.

New additions to the BlackBerry family do look appealing. The BlackBerry Bold 9930 is a messaging phone with the widest QWERTY keyboard of any model that RIM currently offers. Meanwhile, the BlackBerry Torch 9850 is the first touchscreen-only model with a huge display. The former model is for the BlackBerry faithful; the latter is for those eying an iPhone.

Alan Panezic, the vice president of software at RIM, told us that small businesses tend to choose BlackBerry devices because employees tend to be even more mobile and need reliable and secure messaging. The platform is enterprise-class (e.g., a more secure connection to e-mail, more impervious to rootkits) without the enterprise costs. In fact, RIM just released a free new management tool that works with webmail products like Gmail for Business.

The new platform runs on the Web and allows small businesses to control how phones are used -- for example, a phone can be locked from downloading apps. A new feature in BlackBerry 7 is also business-minded. Called BlackBerry Balance, the feature creates a clear divide between corporate messaging and consumer functions. For example, when you receive an e-mail for work, you cannot copy and paste any of the text over to another app.

And, the new phones show promise. A new screen tech called Liquid Graphics makes photos and video pop while providing a more responsive touchscreen. Both the Bold 9930 and the Torch 9850 use a fast 1.2GHz processor and have a 5-megapixel camera. Another key improvement: the BlackBerry 7 operating system, unique to the new smartphones, now runs faster and supports over 40,000 apps. Eventually, RIM will release phones that use the QNX operating system, which is the next-gen OS that powers their PlayBook tablet.

Proof in the pudding
These new innovations show that RIM is trying to push the envelope. They may be in survival mode, but being entrenched as a business platform is helping them stay focused. However, most analysts are in a wait and see mode to see how this all evolves.

Ross Rubin, an analyst with NPD who covers smartphones, told us that RIM’s biggest selling point right now is that they are breaking out of a staid formulaic approach. For years, the company has relied on their keyboard and enterprise features to win customer. Now, OS improvements -- especially with QNX on the PlayBook -- have provided new momentum.

“The big news is really that BlackBerrry 7 providies a smooth, responsive user experience,” he says. “That will go the longest way toward improving the BlackBerry experience.”

That said, RIM has a lot of work to do. Rubin says Android developers are also starting to offer more secure messaging products, and Google Apps for Business is encroaching on the business messaging space. The serious concern: business users are buying their own phones these days, and often gravitate to the latest models from Samsung and HTC.

Indeed, just when RIM releases a compelling touchscreen phone like the Torch 9850 (which weighs 4.76 ounces and is .45-inches thin), along comes a much thinner and lighter phone like the Samsung Galaxy S II (which is 4.09 ounces and .33-inches thin).

Rob Enderle, the principal analyst at Enderle Group, is a major RIM dissenter. He says the platform is “falling like a rock” and that three out of four current BlackBerry customers are considering a switch. He says the PlayBook is “crippled” and that even Sprint pulled the plug on supporting the device with a 3G model. 

The solution? Enderle says RIM had better start showing some love to current users. That could mean re-focusing on phones that have wide keyboards for easy typing and beefing up enterprise services to keep corporate behemoths happy. Gartenberg agrees that RIM needs to keep their focus: they can’t rely on the successes from ages ago. Businesses are more and more consumer-driven by shiny objects of desire. RIM, you better get polishing.

Last updated: Aug 25, 2011

JOHN BRANDON | Columnist

John Brandon is a contributing editor at Inc. magazine covering technology. He writes the Tech Report column for Inc.com.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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