BlackBerry stands up to iPhone onslaught

The Apple iPhone is by any account a masterpiece of industrial design, and is now such a common sight in the hands of technology executives that IT industry anthropologists would be forgiven for thinking that the more staid and professionally skewed BlackBerry was falling out of favour.

That perception wasn’t helped by a profit warning from BlackBerry maker Research in Motion (RIM), issued in early December, that predicted growth would ‘slow’ to around 65% (down from 100% plus that RIM enjoyed up until recent quarters) and sent the company’s share price plummeting by 7%. What’s more, the worldwide market for smartphones has also slowed, and analysts predict that will hurt BlackBerry more than iPhone sales.

But while it might be feeling in a recessionary draught, RIM is far from struggling. The company nearly doubled its subscriber base in 2008 to 14 million. And it holds out great hope for its iPhone challenger, the BlackBerry Storm.

“Most organisations accept mobility as a primary part of doing business, and BlackBerry has proved itself a low-cost productivity-boosting solution,” says David Heit, RIM’s senior product manager.

Many users are increasingly using such devices as a surrogate laptop, a fact that surprised Heit. RIM “never promoted it as a laptop replacement,” he says. “But many people on a business trip just need a cell phone, email and maybe access to a dashboard, and a Blackberry is a suitable substitute [to carrying a laptop].”

While 42% of its subscriber base is nonenterprise, BlackBerry still dominates the enterprise market because of the BlackBerry Enterprise Server (BES) which allows an organisation to push policies out to the devices from a central system. This is a boon for help desks, Heit says. “If you don’t get your email or SAP data, the problem doesn’t go to the carrier; it goes to the IT help desk. The help desk has to have the tools to remotely support the end user.”

The BES also gives BlackBerry a strong hand over the iPhone for enterprise deployments: security, in the form of 400 configurable policies ranging from forcing alphanumeric passwords to blacklisting applications. The software also allows a phone to be wiped remotely if lost or stolen.

Debate rages over whether the iPhone’s browser is its strongest feature, but the BlackBerry’s ‘killer app’ has always been email. That may change, though. According to Internet traffic watcher Hitwise, email traffic has been outweighed by social networking traffic since September 2007.

“We’re seeing that trend too,” Heit admits. “Email is giving way to other collaboration technologies, voice, instant messaging, even business social networking. I don’t think it’s a case of one replacing another, but these are key things for our platform to support.”

BlackBerry’s core differentiator – push email, that allows mails to be typed and queued for sending while offline – is still valid in the social networking era, says Heit. “You can’t always be connected, for instance in an elevator, plane or old building,” he explains. “If I have to wait until I’m online again, that’s dead time.”

Nonetheless, BlackBerry’s dominance of the enterprise sector is not a given. The success of iPhone, Heit says, “validates that the smartphone is the way ahead,” while Google Android “is further validation of the mobility space. And as it continues to develop we expect to see more entrants,” he says.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

Related Topics