RIM would be better off if you hadn’t bought a BlackBerry
The punchline: RIM has never made outstanding products, but novelty, loyalty, and eventually network effects helped them compete beyond their league. It’s a great short-term business proposition, but it masked their problems from management and let them fall far out-of-step with the competition. RIM is starting to get the picture (about 2-3 years after major complaints became accepted in the mainstream) that Canadians in particular are a poor indicator of their business potential.
A few years ago, Research In Motion (RIM) was an unstoppable Canadian powerhouse, sweeping across the globe. The only phone secure enough for POTUS; the only phone that could keep you perpetually connected; the golden standard for governments and businesses. The allure of such institutions drove college kids and young professionals to buy the phones as a status symbol, a means to belong. BlackBerry Messenger (BBM) wooed the young, social generation with instant gratification that surpassed texting; what’s more, now you know if your message has been read. If you ignore the social ramifications, this is a phenomenal business strategy that blossomed greatly; the BlackBerry held an iconic position as THE phone to have.
Even once the iPhone entered the market, BlackBerry held its ground in the social and “serious people” demographics. As more smartphones hit the market, thruth behind BlackBerry was exposed, their interface is awkward and their OS is clumsy (it had never been top-droor, but it never really had competition before.) Don’t forget that their phones break easily. And frequently. (Keyboards and trackballs/thumbpads are the most common.) These were never amazing phones, but they were “ahead of their time” so they didn’t have to be perfect. Granted RIM has tried to upgrade the phones, the OS, and just about everything else, but their massive innovation seems to have stopped soon after BlackBerry hit the market. Now they have to play catch-up. They were late to the touchscreen game and have yet to make a sure-footed foray into that market. Their regular line has barely changed in an appreciable way and the increases in functionality pale in comparison to the field. (My phone comes with a stock video game that is better than anything I played on my N64 as a kid; I don’t expect that on a BlackBerry, but I expect to be wowed in a commensurate way if I’m going to shell out the same amount of cash.)
I’ve watched a surprising number of friends purchase BlackBerry phones in recent months and it continues to baffle me. Review after review places the advantage squarely in Android’s court, as well as the iPhone’s to a lesser extent. There are some great sites for comparing cell phones, in terms of components and features; often the articles are long, but it’s a small price to pay when you’ll likely spend 2-3 years with the same phone. Despite generally positive reviews, BlackBerry phones almost never stand up to the competition, and the rational world has accepted the brand’s inferiority as a now-forgone conclusion. So why do people keep buying them?
A tweet by friend of mine, who only just bought an Android and has lamented the error in his lack of willingness to change, sums it up succinctly:
“Hard to give up on a Canadian company. My patriotism is my bane.”
Loyalty; how fickle a virtue you are. It is the most-cited reason proffered by my friends and acquaintances for buying a BlackBerry. (Second is “I want to talk to my friends on BBM.”) A very close friend received a BlackBerry for Christmas. I tried to talk her out of it, listed all of the technical reasons I knew, but it was to be a gift from her parents and they were going to get a better price from some family friends who work at RIM. Oh and she wanted to support the Canadian company, had always dreamed of being an exec with a BlackBerry, and naturally wanted to support family friends who work for RIM. Not a month later and she’s noticing issues (some I hadn’t even known about) and realizing why people don’t really like BlackBerry anymore (she’s doubly pooched because she got their touchscreen phone). Bear in mind that this is her first smartphone so she has nothign to compare against and she still “gets it”. I’m sure she “loves” the phone, it was a gift and it seems to get the job done, but was it the right phone for her? No. Is it the right phone for anybody? Probably not. (Note: Smartphones make bad gifts. They entail extra costs in the form of network connection and phone number transfer fees, acquiring a sim card, and then the necessary data plan. BlackBerry phones are worse because you need a separate data package if you want to connect to their network for push e-mail and BBM. There is little to no point in owning a smartphone if you don’t have a data plan. This “gift” will end up costing the recipient upward of $200 more per year [obviously a fair amount less if they decide that they want their smartphone to be pretty but not do anything, avoiding data.])
Now let me ask you somethign: would you smoke because your cousin works for Marlboro? Would you wear t-shirts to the office because your buddy works for Gildan? (Actually, Gildan makes fine products, but just because they are Canadian doesn’t mean you’ll purchase them if they aren’t the right fit for your life.) There is no amount of associative support or pride that you can offer that will outweigh the mediocrity of a BlackBerry phone. You aren’t supporting a friend or family member working at RIM by buying a BlackBerry. The company won’t notice YOUR few hundred dollars, your purchase won’t get them a bonus and it won’t save the company; what’s more if your friend/family member is proud of the products RIM now churns out, they need to be given a shake anyway. Here’s what your purchase actually does: it signals that you are OK with a mediocre product. People buy BlackBerry phones whether they are the best on the market or not, so RIM has not had the incentive to be truly innovative for quite some time. Unfortunately it may be too late for them now (a reality that drives more “devoted Canadians” to cling to the brand; not enough to save the company, mind you, but still quite a few.) What RIM has needed for close to three years (two for sure), is for Canadians to make intelligent decisions when purchasing phones. When the smartphone race was first heating up, RIM could have stayed in the thick of it, but probably didn’t realize that they needed to truly improve their phones because they were still growing at a reasonably strong rate.
Rim’s descent is being slowed by the expansion into developing markets, where cheaper phones and network effects are premium values. There are a lot of people without smartphones, meaning that there is plenty of room for growth for every major player, but inferior products will catch up with RIM, especially once mobile phones have spread through the world. Quality and price-point will become paramount, and RIM has too much pride to become a discount brand.
The good news is, BlackBerry has recently changed leadership and may be able to right the ship. If the management team takes a page from their origin and becomes truly innovative (like their major competitors), they have the positioning to become a major force once again. A focus on quality and fluidity of use will go a long way. Also, a free strategy suggestion for RIM – allow other phones to have access to BBM and your push e-mail newtork. Make them sign up through wireless carriers like every BlackBerry user; it’s free money for R&D in phones and the network, and a strong signal to the market that you are really going to compete. I bet a lot of people would pay the extra $5 a month to connect (I know I would.)
|Prototype for this year’s new BlackBerry
Here’s my call, either they nail the next two product launches (likely they’ll do passably, at best, on this coming year, but hopefully step up next year once the new management’s direction can take hold) and be a relevant force again by 2013-2014, or, more likely, they will fade from the market by 2016. They will still hold 20-30 percent of the Canadian market for a while until the network effects of Android and iPhone (and maybe Meego or Symbian?) dominate the last crepuscule of loyalty Canadians have.
About 4 months ago I called that RIM would get purchased by Samsung once they start to fade. At the moment I don’t think Microsoft/Nokia are positioned well enough to use RIM, and Samsung is the dominant provider of middle and upper-tier Android phones. RIM’s patents, network and proprietary tech would give Samsung a great position against Apple and better bargaining power with Google when it comes to OS development, meaning tailor-made OS builds wouldn’t be out of the question.
The Industry in General
You need to realize that your new smartphone is almost as powerful as my first laptop, which I got in 2006. A 1.6Ghz Dual-Core Processor with 2 GB of RAM vs. my 1.2 Ghz dual-core phone with 1 GB of RAM. The q-HD screen on my phone is better than my laptop was, despite the 256M Graphics card my laptop boasted (which served little purpose for me beyond scalding my lap.) Oh and my phone battery lasts longer, my phone has portable internet access, it’s smaller and it interacts What’s more, a $200 Android phone has 80% of the functionality of a $600+ iPhone. (Bear in mind that technology pricing is frequently exponentially priced, which means that each minor level of improvement above the current standard results in a far greater price. A new iPhone is significantly better in a mostly, but not uniquely cosmetic way.)
Let’s be honest, even the worst BlackBerry SHOULD be an improvement over an old feature phone. (Some would contend that less-than-functional extra features are a significant detractor; I don’t disagree but if that’s the case, read some reviews ahead of making the purchase and avoid smartphones until they hold up to your standard.) But that’s hardly the marker you should be using; by that logic, using letters is acceptable because they are a massive improvement over smoke signals. No, you need to look at what is available at the time (or projected to hit the market within a month, if you have enough patience) and pick the best value; this shouldn’t surprise anyone.
One thing to note is that American bandwidth is going to reach a deficit soon. More people hogging more bandwidth is going to fill up the usable spectrum, resulting in slower speeds and more dropped calls. In fact, the spectrum may reach capacity as early as 2013. This would give RIM’s data-compression technology added value, and a great stepping stone for future development; the question is will they capitalize on it?
Knowing What to Buy
Academic literature in the fields of decision theory and choice optimization suggest that the differences between comparable products are often so small that deliberation costs time that could be devoted to other things, like using the product; the suggestion is just to pick one and go with it. What the literature does not say is “anything will do.” It tends to take as granted that a base amount of research will be performed to isolate a target group of products that will fulfil your needs in terms of quality, features, costs, etc… (This is largely a tacet assumption.) What’s surprising is how few people actually do this research; while I tend to over-research, the average person is content to rely on your resident BestBuy salesperson (or equivalent.) Sometimes they know their products well, but more often than not they know the talking points. 20 minutes of research on RAM allowed me to steer my sister away from a new laptop model that would later garner much ire in the public forum because if would lag relatively easily. Depending on the product, bookmarking 3-4 wikipedia pages and skimming them before you make the purchase can make a huge difference.
(As an example of my over-researching, I once looked into the component manufacturers for cell phone parts, discovering that a certain semiconductor is only produced by two firms, naturally one with a high quality reputation and one with a low quality reputation. I then pared down my list. Do I regret my decision? No. Would I go to that much effort again? Probably not; it turns out that the issues with the low quality products are frequently mitigated by redundancy, something I didn’t know. The lesson for me was that I can know a lot, but I don’t have the time to know everything about everything, and as much as that bothers me, I have to accept it. I’ll still research more than most of you and often make better choices because of it, but my time is too precious to throw away to that extent.)
Also, know that it is proposterous to argue that you don’t need a feature because you’ve gotten along just fine without it. Everyone I know who has said at one point or another “I just need a phone that calls and texts,” then bought a smartphone and told me “it’s so cool, there’s all these awesome features I didn’t know about, and even things I didn’t think I’d use are pretty good to have.” 1) Remember that texting wasn’t a “necessary” feature a decade ago. 2) The vast majority of these people have not become phone addicts. If your worry is that you will “over use” the phone, just learn to control yourself better. These smartphones are meant to make life easier, and in so many ways, they do. Embrace it! Maybe you don’t need a fancy camera with a dedicated photo button (though I tend to use my phone camera more than I ever used my top-of-the-line point-and-shoot) or higher RAM, or a front-facing camera, or any number of other features. But you never know, so don’t shy away just because the phone has them. You have no idea which features will and won’t be useful until you play with your phone and explore its capabilities. Some you anticipate to be great and won’t ever use, and others seem pointless but wind up getting a heavy amount of screen time. Avoiding data is a self-declaration of membership to the tribe homo troglodytus.
Instead of just figuring out which features you want/need, see which features are available in each price range. Pick the range you are comfortable with and then compare phones from there. Also, be open to new ideas. I was dead-set on an iPhone or a BlackBerry last summer. I came away with an amazing Android that is still competitive with the top phones on the market today.