RIM revamps BlackBerry to make a run at Apple

Posted on June 22, 2010

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With Apple’s iPhone 4 on tap, Google’s Android multiplying like rabbits and Microsoft’s Windows Phone 7 gearing up for a last-ditch stab at mobile relevancy, Research In Motion’s BlackBerry is now the overlooked operating system. RIM has made few headlines since April, when it announced the long-awaited BlackBerry OS 6.0 update will finally launch sometime during the third quarter–the revamp can’t come soon enough, because consumer interest in the platform is flagging. BlackBerry remains the leader in U.S. smartphone market share, representing 35 percent of smartphones nationwide according to Nielsen, but its overall share dipped 2 percent between Q4 2009 and 04 2010; during the same period, iPhone and Android each increased 2 percentage points, with the former now accounting for 28 percent of the U.S. smartphone market and the latter making up 9 percent. But this week it became clear RIM isn’t giving up its lead without a fight.
The biggest news is still a rumor: The Wall Street Journal reported Research In Motion is at work on a series of new devices and software solutions developed to combat Apple’s mobile media dominance. Sources indicate RIM is presently trialing a new BlackBerry OS 6.0 smartphone boasting a user experience decidedly reminiscent of the iPhone, enabling consumers to swipe through screens and expand images with their fingers. The phone also features a universal search bar enabling users to more efficiently seek out device data as well as look for online content. In addition, the Journal notes RIM is experimenting with a tablet device to rival Apple’s hit iPad–the unit, still in the early stages of development, would connect to wireless networks via BlackBerry phone. A RIM spokesperson said the firm does not comment on rumors or speculation. 
On the other hand, RIM did confirm plans to make over its BlackBerry App World storefront with the addition of support for operator billing as well as a host of related upgrades. RIM unveiled BlackBerry App World 2.0 during a New York City press event Wednesday–while at present the store supports only PayPal-based billing options, CIO reports that the refurbished marketplace will introduce carrier billing as well as credit card options. BlackBerry App World 2.0 also updates the My World section, incorporating separate sections for users’ archived and pending downloads, along with a Newest Apps category spotlighting the latest additions to the catalog. Also new: BlackBerry ID, which links to the user’s email address to enable consumers to switch between devices or carriers without losing their applications and preferences; a smoother UI based on BlackBerry OS 6.0; and improved search tools. According to App World product manager Alex Kinsella, the new store will go live sometime “this summer.”
BlackBerry App World desperately needs a boost–a year after it first opened, RIM recently said the marketplace offers fewer than 7,000 applications, far behind rivals like Apple’s App Store (over 225,000 iPhone and iPod touch apps at last count). Operator billing should go far in fostering consumer interest in the redesgined BlackBerry App World: A recent study conducted by mobile commerce and communications enabler Netsize contends that app stores must offer consumers a host of billing mechanisms to succeed, with 85 percent of mobile professionals surveyed citing operator billing as a key component of app stores’ mass-market appeal. Forty-six percent of respondents indicate a belief that operator billing alone will dominate, while 39 percent include credit card billing in the mix.
But perhaps the most promising omen for BlackBerry’s future has absolutely nothing to do with RIM’s own efforts to expand and enhance its brand. Instead, AT&T’s recent decision to retire its $29.99 per month unlimited data pricing plan in favor of offering new subscribers a tiered model based on usage–a move since copied by British operator O2–could benefit BlackBerry, while at the same time proving detrimental to iPhone, according to an analyst note published Monday by Susquehanna Financial’s Jeff Fidacaro. Forecasting the introduction of reduced entry-level data pricing will encourage a significant number of subscribers to swap their feature phones for smartphones, Fidacaro contends that BlackBerry devices are ideally positioned to capture this new business, crediting their affordable prices and emphasis on low-bandwidth applications like email and instant messaging. Conversely, data caps could limit future adoption of the iPhone, a device synonymous with high-bandwidth apps like streaming video.
“In our view, tiered pricing could create adverse behavior by consumers as users will watch their data usage more closely and avoid overage fees (similar to when we used to wait until 9pm to place a wireless call so as not to use up minutes),” Fidicaro writes. To support his argument, he cites a recent study issued by bill analysis firm Validas, which states that that the average iPhone user in the U.S. consumes 273 MBs of data per month (far above AT&T’s 200 MB entry-level data limit) while the typical BlackBerry user consumes just 54 MBs. Who would have guessed–for all the changes and innovations in BlackBerry’s immediate future, the key to its success might lie in the platform’s messaging-centric past.

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