Originally Posted by
LuvULongTime As good as BES and BBM can eventually be on iOS and Android, the handset itself is still an important piece of the security puzzle.
I don't disagree with this - there's no question that BB's handset security is better because security was always BB's first and top priority. I don't think any knowledgeable person is going to argue that BB's handsets aren't inherently more secure than iOS and Android (but neither of those are nearly as bad with security as many CB folks often suggest).
But when you make a niche product without the benefits of economies of scale, you must be able to charge (and GET) a premium price for your product, or making that product simply isn't sustainable, regardless of how much better it is than the competition.
BB is in a weird position - now they're competing against themselves. On one hand, either BB10 is required to get proper security, which means BES12 is going to be inadequate (if used with something other than BB10 phones), OR, BES12 is a good enough product to provide security that's good enough for the majority of BB's customers, and thus, BB10 isn't really necessary. You can't have it both ways.
And with that being the case, if handset sales are continuing to lose money and drain R&D and production resources, then no matter how much better BB10 phones are than than the other OSs, it won't make financial sense to continue to produce them.
And with all of the competition in the MDM/EDM space (and more and bigger players entering), I'm not sure BB is going to be able to get premium prices ($1000-$1500 per handset) to compensate for only producing 5-7M phones a year (the current sales rate) across several very different models, which further erodes economies of scale. An analogy to cars is often made in these discussions, but rarely is it brought up that a Porsche, while certainly performing much better than an average car, is also priced at least 2-3 times what an average car costs. If BB can't get that premium price in the face of all of the competition, which I think is highly unlikely, then sooner or later, pressure from investors will force BB to exit the money-losing handset business.
Keep in mind that Chen is a Software & Services guy, and is not in any way wedded to the hardware, except to the extent that he has to keep it alive for now until BES12 and protected-BBM are launched and working well enough to take over.