Will the popular e-mail service keep running?
Millions of BlackBerry fans are focusing their attention on a Virginia courtroom, where a U.S. District Court judge promises to announce--one day--whether the popular e-mail service can keep running.
But long-term, Research in Motion has a bigger problem than its dispute with Virginia-based NTP, which alleges that RIM's BlackBerry wireless e-mail service infringes upon its patents. Regardless of how the company's legal troubles pan out--today a growing number of analysts were predicting a settlement that would keep RIM running--it will face increasing competition from players who want some of the U.S. wireless e-mail market it dominates. And RIM's patent battle has given them a chance to make their case to nervous information-technology managers.
"The damage to the BlackBerry brand has been done," says Ferris Research analyst David Via. "A lot of people are evaluating alternatives." Some of that has already started happening: RIM had 81% of the North American wireless e-mail market in 2004 but slipped to 70% last year, estimates Gartner analyst Tole Hart. RIM did not respond to interview requests.
RIM's best defense is that there aren't a lot of true alternatives out there--yet. The most important part of the BlackBerry feature set is its "push" technology, which automatically sends e-mail to users' devices without requiring them to refresh their machines. But while some competitors already offer push, more are coming.
Microsoft made a splash earlier this month by announcing it would be offering a push service via its Windows Mobile platform. Research group J. Gold Associates is already sold, predicting the technology will help Microsoft pick up 15% to 20% of the smartphone market in the next few years.
And while RIM so far only offers homegrown gadgets, Microsoft's relationships with myriad device manufacturers and mobile carriers means a wider range of smartphones, many with richer feature sets. Up until now, Windows Mobile handhelds haven't compared well to BlackBerry's models. But new smartphones from Hewlett-Packard, Palm, Motorola and Taiwan's HTC could give RIM a run for its money. The new smartphones sport slimmer form factors, multimedia capabilities and handy add-ons like Wi-Fi and removable memory cards for a more powerful mobile experience.
One downside: cost. RIM's success can be partly attributed to its economics--simple BlackBerry units retail for less than $200. But Windows Mobile devices can start at $300, and future smartphones could cost twice that.
Another hurdle for Microsoft will be convincing customers that its software is secure enough. "There has been a lot of discussion about whether Microsoft's security is as good as others," says Ryan McEnroe, director of systems and technology for Reed Smith, a Pittsburgh-based law firm that uses 1,300 BlackBerries. "RIM has very good security--it has been the model for other solutions." A Microsoft spokesman says security won't be a problem.
Many companies are also sizing up options for Palm's Treo devices.
Though neither the manufacturer of Palm devices nor the maker of its operating system offer a push e-mail solution, third-party software companies do support the service for Treo smartphones.
Everyone.net's ChatterMail client is an inexpensive alternative for small business or individuals, while larger businesses can use Goodlink's software for Microsoft Exchange e-mail servers.
But Palm devices also haven't earned the same trust that BlackBerry has among enterprise IT organizations, especially when it comes to security. Thomas Jarrett, CIO of the state of Delaware, says he's considered using Treos for his 300 users but feels more comfortable with RIM.
"BlackBerry lets us lock down things on our end, so we can control it," Jarrett says. "All this crazy stuff like downloading applications can happen with a Treo." If he has his way, Delaware will remain a BlackBerry state.
One wild card is Finnish handset maker Nokia, which dominates the international smartphone market and will be entering the U.S. smartphone market with several devices in the next six months. It will first launch the 9300--a long, narrow clam-shell design--and later the E61, which features a square, metallic form factor similar to the BlackBerry.
But Nokia's most useful feature in its U.S. launch is the fact that it owns Intellisync, a push e-mail provider it acquired this month. The system is already in use in some corporate IT departments, including some Verizon Wireless customers that use Palm Treos. The deal gives Nokia a service it can sell with both its own phones and those from other manufacturers.
Nokia is well positioned to take advantage of any anxiety being felt by RIM customers, says Tom Libretto, director of marketing for Nokia Mobility Solutions.
"The reality is that all of us in this industry use the same sort of encryption technology and methodologies," he says. "One isn't better than the other anymore, but RIM benefited from being first to market. Now, we have a big opportunity ahead of us."
Millions of BlackBerry fans are focusing their attention on a Virginia courtroom, where a U.S. District Court judge promises to announce--one day--whether the popular e-mail service can keep running.
But long-term, Research in Motion has a bigger problem than its dispute with Virginia-based NTP, which alleges that RIM's BlackBerry wireless e-mail service infringes upon its patents. Regardless of how the company's legal troubles pan out--today a growing number of analysts were predicting a settlement that would keep RIM running--it will face increasing competition from players who want some of the U.S. wireless e-mail market it dominates. And RIM's patent battle has given them a chance to make their case to nervous information-technology managers.
"The damage to the BlackBerry brand has been done," says Ferris Research analyst David Via. "A lot of people are evaluating alternatives." Some of that has already started happening: RIM had 81% of the North American wireless e-mail market in 2004 but slipped to 70% last year, estimates Gartner analyst Tole Hart. RIM did not respond to interview requests.
RIM's best defense is that there aren't a lot of true alternatives out there--yet. The most important part of the BlackBerry feature set is its "push" technology, which automatically sends e-mail to users' devices without requiring them to refresh their machines. But while some competitors already offer push, more are coming.
Microsoft made a splash earlier this month by announcing it would be offering a push service via its Windows Mobile platform. Research group J. Gold Associates is already sold, predicting the technology will help Microsoft pick up 15% to 20% of the smartphone market in the next few years.
And while RIM so far only offers homegrown gadgets, Microsoft's relationships with myriad device manufacturers and mobile carriers means a wider range of smartphones, many with richer feature sets. Up until now, Windows Mobile handhelds haven't compared well to BlackBerry's models. But new smartphones from Hewlett-Packard, Palm, Motorola and Taiwan's HTC could give RIM a run for its money. The new smartphones sport slimmer form factors, multimedia capabilities and handy add-ons like Wi-Fi and removable memory cards for a more powerful mobile experience.
One downside: cost. RIM's success can be partly attributed to its economics--simple BlackBerry units retail for less than $200. But Windows Mobile devices can start at $300, and future smartphones could cost twice that.
Another hurdle for Microsoft will be convincing customers that its software is secure enough. "There has been a lot of discussion about whether Microsoft's security is as good as others," says Ryan McEnroe, director of systems and technology for Reed Smith, a Pittsburgh-based law firm that uses 1,300 BlackBerries. "RIM has very good security--it has been the model for other solutions." A Microsoft spokesman says security won't be a problem.
Many companies are also sizing up options for Palm's Treo devices.
Though neither the manufacturer of Palm devices nor the maker of its operating system offer a push e-mail solution, third-party software companies do support the service for Treo smartphones.
Everyone.net's ChatterMail client is an inexpensive alternative for small business or individuals, while larger businesses can use Goodlink's software for Microsoft Exchange e-mail servers.
But Palm devices also haven't earned the same trust that BlackBerry has among enterprise IT organizations, especially when it comes to security. Thomas Jarrett, CIO of the state of Delaware, says he's considered using Treos for his 300 users but feels more comfortable with RIM.
"BlackBerry lets us lock down things on our end, so we can control it," Jarrett says. "All this crazy stuff like downloading applications can happen with a Treo." If he has his way, Delaware will remain a BlackBerry state.
One wild card is Finnish handset maker Nokia, which dominates the international smartphone market and will be entering the U.S. smartphone market with several devices in the next six months. It will first launch the 9300--a long, narrow clam-shell design--and later the E61, which features a square, metallic form factor similar to the BlackBerry.
But Nokia's most useful feature in its U.S. launch is the fact that it owns Intellisync, a push e-mail provider it acquired this month. The system is already in use in some corporate IT departments, including some Verizon Wireless customers that use Palm Treos. The deal gives Nokia a service it can sell with both its own phones and those from other manufacturers.
Nokia is well positioned to take advantage of any anxiety being felt by RIM customers, says Tom Libretto, director of marketing for Nokia Mobility Solutions.
"The reality is that all of us in this industry use the same sort of encryption technology and methodologies," he says. "One isn't better than the other anymore, but RIM benefited from being first to market. Now, we have a big opportunity ahead of us."
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