I remember thinking a couple of years ago that Apple iPhones were going to knock the Blackberry off the smart-phone market. But nothing like that has happened. RIMM released some very convincing quarterly results last week. Apparently RIMM seems to be doing just fine, never mind the slew of smart-phone entrants. On top of protecting its corporate user turf RIMM is fighting back with the Blackberry Pearl and Curve, taking the battle to the consumer smart-phone segment. Look out Apple (and Nokia), here come the smart-phone mounties!
RIMM has taken the Apple device threat very seriously. Their device line-up has been continuously updated and has kept pace with the latest cellular technology and device features - 3G, application-store, GPS, cameras - you name it and there is a Blackberry model covering the area. Even user interface, Blackberry's Achilles heel, seems to be getting a lot of attention on the newer models. Its a good thing RIMM is looking beyond push email and into actually building general purpose smart-phones. Smart-phones are good for the company's bottom line because the lions share of RIMM revenue comes from device sales. Users need to see glitzy, application laden devices to consider upgrading frequently. After all email by itself is only a text-based application (remember those monochrome Blackberries that handled email just fine). Fortunately, RIMM has not fallen into the Polaroid-like trap of living off one single success and has instead covered broad market segments with multiple device offerings and continious innovation.
Fortunately for RIMM, Apple has built a deep moat around its iPhone through aggressive pricing and exclusive deals with Telcos that keeps many corporate buyers in Blackberry's stable. Example: Small corporation X, 2000 employees, per unit iPhone cost minus per unit Blackberry cost = $250. Choose the Blackberry and you've saved half a million upfront, avoided iTunes (consumer software) being downloaded and installed on all corporate PCs, and escaped the clutches of very expensive iPhone data plans.
Blackberries are great texting/messaging devices with physical keyboards unlike iPhone's glass tapping virtual keyboard. This qualifies blackberries as the serious corporate tool as compared to the iPhone that has yet to fit into the corporate IT comfort zone. And this brings me to the greatest strength of RIMM - integration with corporate IT systems.
The key Blackberry value is effortless outsourcing of wireless/mobile email for corporate IT departments. No extra servers to run and no expensive data-plans with Telcos. Just a per-month per-account fee and you've got wireless email for employees. Since every other corporation (and Barrack Obama) trusts the Blackberry service, so can corporation X. Outsource email with confidence.
One of the greatest shortcomings of corporate PC email has been the culture of creating and maintaining individual email systems per corporation. This system could have been much cheaper, much better managed and less buggy had there been a uber-email provider like RIMM is for corporate wireless email. And no I don't buy the argument that corporate email needs to be kept inside the company's intranet for data security reasons. If this is so important then please forbid employee blackberries which otherwise bounce every email off a server in Canada.
Fortunately wireless email has remained concentrated in the hands of Blackberry due to its early dominance in this technology and this has made RIMM the single largest wireless push email provider. Everyone benefits, even competing smart-phone manufacturers who can simply buy the Blackberry service for their devices. And thats why RIMM is a buy.