Back in BlackBerry

Written by Reuters | Updated: Feb 4 2013, 17:16pm hrs
If BlackBerry can keep its remaining corporate and government customers in the fold, it has a path to elbow its way into the consumer marketjust like the good old days

John C Abell

With a brand-new smartphoneand a new brandBlackBerry (ne Research in Motion) has embarked on a critical reboot aimed at restoring the fortunes of the company that sparked the mobile revolution.

RIM has been left for dead. For years it hasnt been able to shake off the stink of irrelevance as the iPhone proved that apps were more important than a physical keyboard, and that mobile push e-mail wasnt rocket science. It endured brand-damaging outages to its private network while competitors crowed that their reliance on a public network was far more stable.

Now the company is reinventing itself in a last-ditch effort to survive. In a press conference yesterday, it announced that it had changed its corporate name to BlackBerry to better identify with its iconic product. Meanwhile, it has dramatically upgraded that product after a two-year effort that resulted in new phones designed from scratch and powered by what would be a major mobile operating system: QNX.

BlackBerrys new smartphones, the multi-touch Z10 and the Q10which retains that keyboard some people still swear bymay be the companys last best hope. Ive had the Z10 for only a few hours, but if anything can rekindle our romance with RIM, this is it. These BB10 phones are a gambitnot a gamble. (Ill be doing a full Go Bag review with the road warrior in mind in the coming weeks).

Most of the attention is being heaped on the Z10, as demand for smartphones with physical keyboards is the exception rather than the rule. If it manages to make a dent in a world now run byApple and Samsungwhich together had 51% of the worlds smartphone market share in the last quarter of 2012it will mark one of the great turnaround tales in the history of tech, comparable even to Apples Phoenix-like rise from the ashes in the late 1990s.

Not so long ago, Research in Motion ruled the world. I owned one of its first devices, a RIM 857, which did e-mail like nothing else, and just about nothing else. But that device was a vision of the future in the days before smartphones. The CrackBerry was a road warriors most potent weapon and most impressive coat of arms.

Soon enough, RIM added phone and Web browsing to its devices, and BlackBerrys became an enterprise play: The company could make one enterprise sale and have thousands of new activations in business and government. The iPhone begat a new trend, Bring Your Own Device, threatening the BlackBerrys hold on corporate accounts. The balance of power shifted. Under BYOD, workers now happily buy their own phones, and companies happily support them instead of creating a mobile IT division. Its a win-winfor everyone but RIM. In perhaps the most crushing BYOD rebuff to the BlackBerry, Yahoo! last Septemberdropped its enterprise account and let its employees use pretty much whatever they wantedexcept a BlackBerry.

The good news is that its a great time to be in the smartphone business. They clearly are replacing feature phones as the dominant mobile device. According to research firm IDC,smartphones had their best quarter everat the end of 2012, accounting for 45.5% of all mobile phone shipments. Even though the biggest players own most of that, theres still plenty of business to be had. The high-growth smartphone market, though dominated by Samsung and Apple, still presents ample opportunities for challengers,said IDC senior research analyst Kevin Restivo.

The bad news is that we have become very sophisticated. We expect features and ease of use and for our phones to overlap rather than augment our other digital deviceswhat I call theholy trinityof phone, tablet and laptop. In addition to Apple and Samsung, Google (with Motorola Mobility) and Microsoft (with Nokia) have deep pockets and can wait for the market to come around to them.

RIMexcuse me, BlackBerry doesnt have that much leash. It is unprofitable (though debt-free) and has only 2.6% of the world market.

The BlackBerry Z10 gotmostly positive initial reviews, but investors arenot seeing the positives yet. That may be because the new phones wont be on sale in the United States until March. (They go on sale in the UK today and in Canada in a few days.)

Fair or not, good enough isnt good enough anymore for a smartphone. We evaluate mobile phones now by how good they are at being pocket computers, not by call quality and battery life.

The Z10s app store launches with an impressive 70,000 apps, but it ismissing some big namesand even that number is only about 10% of whats available in Apples App Store. But the real question is whether app developers will now flock to this new platform. In perhaps a portend of things to come, the New York Times, which abandoned BlackBerry last July, was back witha launch-day app.

Among the missing pieces is an equivalent to Apples iCloud and Googles Drive: a cloud-based document creation and collaboration services that can help productivity. BlackBerry is at a disadvantage here: It has no hardware/software ecosystem, unlike its operating system competitors. The Z10 has to do some very heavy lifting on its own. It has to be a phone people want in its own right.

BlackBerry has to not just stop but reverse, the BYOD trend. If it can keep its remaining corporate and government customers in the fold, it has a path to elbow its way into the consumer marketjust like the good old days.

One out-of-the box feature may help close the deal with enterprise clients. BlackBerry Balanceis a feature that gives IT managers an easy way to secure industrial data on the phone. There is third-party software available to do this on the Apple and Android devices, but a holistic solution can be appealing to risk-averse IT departments.

Desperate times call for bold measures. BlackBerry got the message. In changing its name and its game, it has begun a tricky but unavoidable quest.

RIP, RIM. Welcome to the new world, BlackBerry.