1. cgull's Avatar
    From "BlackBerry in the Smartphone Wars"

    So what about BlackBerry? BlackBerry is somewhere in between but closer to the Apple mantra. They sell you the phones (which they make) and don't license out their OS. They have the second most profitable app store (second to... APPLE!) and charge extra for a service called BlackBerry internet service.
    BIS is free, BES is not so is the author simply talking out of his a$$ or was this intentional... or both perhaps. Full article...


    BlackBerry in the Smartphone Wars - AAPL, GOOG, MSFT, NOK, RIMM - Foolish Blogging Network

    Research in Motion (NASDAQ: RIMM), the Waterloo, Ontario based tech firm famous for it's BlackBerry line of smart phones hasn't gotten a lot of slack lately from investors who bought the stock in the hundreds but now see it trading at less then fifteen dollars a share.

    BlackBerry smart phones are being overtaken by cooler and more functional phones mainly from Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG).

    The big problem for BlackBerry seems to be it just isn't innovating or changing with consumers. While Apple's iPhone has hundreds of thousands of apps BlackBerry is stuck with a measly few thousand apps that would never be of quality to be accepted by Apple's app store. Google's Android app store is catching up very fast because of the facility for developers to make their apps and without any hassles see them published on Android without even being reviewed by Google.

    BlackBerry doesn't have apps because developers don't want to develop for BlackBerry. This is for a variety of reasons. For one, BlackBerrys have many different models that are physical keyboard, touch screen and both. While you might say Android has far more devices with many different processors and screen sizes at least all of them are touch screen (with the exception of some VERY uncommon phones) and Google's tools help them easily port it. BlackBerry also has a pretty low powered processor and has little capacity for high powered games and other apps. In a sense also developers don't want to develop for BlackBerry because developers don't want to develop for BlackBerry. The previous reasons make some developers not develop apps and once that happens others follow suit and BlackBerry users stop downloading lots of apps so developers stop developing because there aren't very many customers. Customers continue to leave BlackBerry because of a lack of good apps and finally developers stop developing because customers are leaving and developers usually look for more popular devices of the future, such as iPhone. It might sound like a mouth full but it's all sort of a neat little spiral down the drain and it seems to be where RIM's headed.

    Thornsten Heins and co have been hinting that the BlackBerry 10 Smart phones will support Android apps (or at least give developers a one click solution to port their apps from Android to BlackBerry which RIM has just started doing) the phones could prove popular again. In today's world, security is a pretty big issue and if BlackBerry can repair it's image to what it once was (as the magnet for security freaks and corporations alike) that could attract attention.

    Besides apps, the biggest problem with BlackBerry is it isn't really that cool and those nice flat iPhones can prove quite businessy as well. BlackBerry needs to completely revamp their design so a BlackBerry smart phone looks like it was designed in some perfect zen world (much like that of Steve Jobs) and doesn't look like an antique after one year.

    While these are all major problems the main one is in RIM's offices. RIM employees just aren't excited about what they're working on or passionate about creating the next great product. The best products come from the best people and RIM might have them but it can't seem to make them flourish. Google Chrome and Java are two good examples of great things coming from great companies where brilliance flourishes. What RIM needs to do is recreate that innovative culture it had some time ago and quit playing catch up.With RIM's recent shakeup the company seems to be turning things around (or at least trying). After ousting the two co-CEOs Jim Balsillie and Mike Lazaridis the company has completely restructured the employee base.

    The near future (late 2012), when RIM releases it's next generation of BlackBerry smart phones (the BlackBerry 10 smart phones with Android apps and a new look) will be RIM's real test and the test it will make or break it's brand in. In comparison, RIM is much like Apple of the mid 1990s. A great brand that made it's own sector of the industry (PCs and smartphones) but nearly died because of bad management and the will to milk all the cash possible out of their cash cow's without innovating (much like BlackBerry) or in Steve Jobs words “making insanely great products”. Apple shares tanked down to as low as $7 as the market share fell to about 4% Apple computers. Apple brought back Steve Jobs and started innovating again reviving their products and making them better, more attractive and cooler. From $7 Apple bounced back to over $520 a share in Q1 2012 and doesn't seem to stop growing. Apple's cash horde is now at 98 bil. Dollars and is bigger than the gross domestic product of 135 countries. If RIM could achieve a fraction of the comeback of Apple it could yield spectacular gains. RIM is currently trading at just 3.49 times earnings (while Amazon is at 133 and rival Nokia (NYSE: NOK) which is by most standards in a far worse position then RIM is losing 0.49 a share and selling at $5.10 a share).

    With all that being said let's take a look at competitors. The main competitors for RIM are Google (Android) and Apple (iOS). Android is huge and is hailed by some as the Windows of smartphones made my Microsoft: (NASDAQ: MSFT) (sorry Windows 7 phone). It's open source, cool, and has loads and loads of programs. It's also the fastest growing with 550,000 new devices activated every day. Again, like Windows, it's problem is it isn't really that sexy either. Since it's not a closed system like Apple's iOS it can sometimes be cluttered and is much like a copy of iOS that doesn't have the sexy feel. Apple's iOS has been out for a while longer and definitely has the best feel. It's super easy, the phone is fast and the apps are great but being closed there aren't very many customizations you can do. Like Macs, iPhone's are VERY expensive although there are Androids that actually exceed the price of iPhone (although they are almost always superior in tech specs [the nerdy stuff]).

    The main price of the iPhone is the phone bill (and possibly Apple's biggest cash cow). You'll notice that Apple iPhones use different SIM cards and most of that is because Apple wants complete control over plans carriers offer. You'll also notice that most iPhone plans are VERY expensive usually around $60 a month. The main reason they're so expensive is that Apple takes a big chunk of the plan for themselves and leaves the rest for the actual carrier. The biggest threat for Apple's iPhone is probably customers getting sick of paying massive phone bills when they see that Androids (and the upcoming BlackBerrys) have the same features (or better) and leave the closed garden for lower prices and sometimes cooler phones.

    Googles main threat is probably that they make barely any money off of Android. They don't make the phones and their operating system is free so how exactly do they make money? They don't take chunks of plans but rather take small portions of the money people spend on apps and advertise on the Android phone apps.

    Basically, even if Google signs up 100 times what Apple does they'll make almost the same amount of money. It sounds crazy but it's true. So what about BlackBerry? BlackBerry is somewhere in between but closer to the Apple mantra. They sell you the phones (which they make) and don't license out their OS. They have the second most profitable app store (second to... APPLE!) and charge extra for a service called BlackBerry internet service. The service powers email, BBM (their popular IM platform that only BlackBerry users can have and other BlackBerry services like Maps, Facebook notifications, Twitter and GPS. Usually BIS is about $7 extra on your plan but it is favored amongst businesspeople and socialites because it's secure, fast and surprisingly sleek and easy to use. With a regular data plan on BlackBerry you'd only be able to access Browser but can access email (Gmail, Ymail, AOL mail) from there (although it's much more inconvenient).

    In conclusion, RIM is definitely a struggling company but for investors with an acceptance of risk looking for an undervalued company RIM certainly has the potential for great gains if the company can ace the launch of it's BlackBerry 10 smart phones and convince buyers that BlackBerry really is better and start innovating again.
    02-23-12 12:12 PM
  2. dbmalloy's Avatar
    Vey well written article.... Very easy to understand and very balanced..... Should not throw out the whole article because some facts get mixed up.... As least it is more balanced than the dribble you see on a lot of financial web sites.....

    One thing struck me was the fact Google developers are not making a lot of money.... Heard this before as this is problably why RIM is boasting how much money you can make developing apps....
    Last edited by dbmalloy; 02-23-12 at 12:30 PM.
    02-23-12 12:28 PM
  3. robsteve's Avatar
    Not sure where you are getting that BIS is free, I didn't notice that in the article. It is not free and for every phone on the BlackBerry network, even on BIS, BlackBerry is getting a monthly fee from the carriers. This is even on five year old currenlty active BlackBerries, so it is a recurring charge.

    What makes it look like it is free to the consumer is that since the iPhone and newer phones like the Andriods came out, the carriers have started offering bundled plans that include data similar to how the BlackBerry has been offered bundled with data plans since the beginning.

    In Canada on some of the budget carriers, you can get BIS added to a voice line at $5-$10, without needing data, but it may or may not include email, just social feeds and BBM. Most other carriers just offer smart phone or iPhone data plans and if it is a BlackBerry they put the BIS service on it, but in reality it is all priced into the plan.
    Last edited by robsteve; 02-23-12 at 01:20 PM.
    Laura Knotek likes this.
    02-23-12 01:15 PM
  4. Laura Knotek's Avatar
    ^^^This.

    There are also some countries where carriers charge more for a BIS plan than for other data plans, including some available for iOS/Android.
    02-23-12 02:00 PM
  5. ubizmo's Avatar
    Besides apps, the biggest problem with BlackBerry is it isn't really that cool and those nice flat iPhones can prove quite businessy as well. BlackBerry needs to completely revamp their design so a BlackBerry smart phone looks like it was designed in some perfect zen world (much like that of Steve Jobs) and doesn't look like an antique after one year.
    Good point. And the "uncool" image of BB is in part a legacy of its history as a "business tool", and identity that some users still mention when anybody will listen.

    Business isn't cool. So if the goal is to acquire a cool image, BB has to overcome its own past, as well as its design. Personally, I think my 9900 is an attractive device, but I don't pretend to have my finger on the pulse of what's cool.

    Since buying a WP7 phone as an "experimental" device, I'm struck by how careful Microsoft is being to avoid the mistakes of RIM. The WP interface is nothing if not cool. It offers an iPhone like user experience with a slick Metro look, and runs smoothly on phones that aren't on steroids. MS has figured out about the care and feeding of developers, and the WP Marketplace is growing a quite a clip: over 60,000 apps now, and frequent updates to listed apps.

    MS bought Skype, and Skype will be coming to WP. Kindle and Netflix are already there. MS has its own uncool history, but they seem to be making the right moves to overcome it.

    I don't think WP7 can match BB in terms of sheer functionality yet, but they seem to be making all the right moves, including a forthcoming update to make WP7 runnable on lower-end devices. The press coverage of BB always focuses on comparisons with iPhone and Android, but I think they also need to be looking in the rear-view mirror.
    02-23-12 02:21 PM
  6. Lead_Express's Avatar
    My 9900 is very cool. I'd be happy with it for another year if the BB10 phones don't come out. Another thing I noticed is that the author of the articel cited Google Chrome as a brilliant product; am I the only one who thinks Chrome sucks?
    02-23-12 02:42 PM
  7. undone's Avatar
    There are couple things the article doesnt expand enough. Apple is killing the carriers. How long do you think they will let it happen? Recently I think both ATT and Verizon on there earnings took a beating because of the IPhone mark ups with hopes to make up the difference over the life of the contract. Apple might push there products, but I doubt the carriers will really 'push' the devices they make less on, at least over the long haul. Google's recent moves to purchase Motorola change the Android game, outsiders like HTC and Samsung might find 'other' platforms to develop with if Google keeps the best for its own handsets.

    Apple will 'abandon' the handset market at some point once they establish there next product to kill the market with. I think Apples over all strategy seems to move from product to product increasing it 'fan' base and selling them whatever they have made 'better'. Apple has perfected the milking it machine.
    Last edited by undone; 02-23-12 at 03:06 PM.
    02-23-12 02:59 PM
  8. mud314's Avatar
    I lost interest in this article when he started saying that Devs don't want to create for BBs because of the variety of phones. Is the author not aware Android's legion pushes out a new Android phone daily and they are all different? Most still pushing out with the OLD os instead of the new one.
    02-23-12 03:03 PM
  9. mud314's Avatar
    Good point. And the "uncool" image of BB is in part a legacy of its history as a "business tool", and identity that some users still mention when anybody will listen.

    Business isn't cool. So if the goal is to acquire a cool image, BB has to overcome its own past, as well as its design. Personally, I think my 9900 is an attractive device, but I don't pretend to have my finger on the pulse of what's cool.

    Since buying a WP7 phone as an "experimental" device, I'm struck by how careful Microsoft is being to avoid the mistakes of RIM. The WP interface is nothing if not cool. It offers an iPhone like user experience with a slick Metro look, and runs smoothly on phones that aren't on steroids. MS has figured out about the care and feeding of developers, and the WP Marketplace is growing a quite a clip: over 60,000 apps now, and frequent updates to listed apps.

    MS bought Skype, and Skype will be coming to WP. Kindle and Netflix are already there. MS has its own uncool history, but they seem to be making the right moves to overcome it.

    I don't think WP7 can match BB in terms of sheer functionality yet, but they seem to be making all the right moves, including a forthcoming update to make WP7 runnable on lower-end devices. The press coverage of BB always focuses on comparisons with iPhone and Android, but I think they also need to be looking in the rear-view mirror.
    I agree with you the 99xx is one of the sexiest phones on the market. As for the interface on the WP7, cannot stand it.
    02-23-12 03:05 PM
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