RIM in the crosshairs

Two new mobile devices may not knock out Research In Motion Ltd. and its “BlackBerry” devices, but their functionality and features could be a warning shot across the bow of the RIM flagship.

Motient Corp., the world’s largest two-way wireless network carrier, recently announced its MobileModem, a snap-on device that connects to a Palm V or IBM WorkPad (which is basically a Palm V). With the MobileModem activated, the Palm V devices can provide “always on” e-mail functions similar to that of the BlackBerry.

For the millions of Palm V users who haven’t upgraded their devices, this represents a chance to add the features of wireless e-mail (Internet e-mail plus mail forwarding from Exchange and Lotus Notes) at a decent price. For example, it costs US$279 for the base Motient unit, but discounts for signing up for the service and other rebates could bring the price down to as low as US$179.

Motient also sells RIM devices via its eLink service, so in effect, it may start competing with itself. But Motient officials aren’t too worried, as they see the bigger fish being the Palm V users, not the niche market of RIM users.

The second company that may soon be adding “always on” functionality is Handspring, which on Oct. 15 announced its new Treo family of devices.

With Treo, Handspring removed the Springboard expansion slot and fully integrated a phone into the PDA (personal digital assistant). At about the size of a wallet, the new device is smaller than previous Handspring models. The phone connects via a Global System for Mobile communications network (or General Packet Radio Service [GPRS], whenever these networks get up and running), with future plans for a Code Division Multiple Access version. The phone functions look pretty good, with better integration between the phone and address book functions. And the Web surfing feature will include Handspring’s very nice Blazer browser.

On at least one Treo model, Handspring has replaced the familiar Grafitti writing area with a “thumb-type” keyboard that looks eerily similar to the keyboard on both RIM devices. With a keyboard, it will be much easier to perform the messaging functions of the device. Out of the box, the Treo will include Short Message Service, and a POP3 e-mail client. Once GPRS networks are available, the Treo will then be able to do what it calls “push e-mail,” Handspring’s term for having your e-mail forwarded to you on an “always on” situation.

Handspring is shying away from the RIM competition question, mainly because it wants to go after consumers, and RIM is clearly an enterprise sell. But once the GPRS networks launch, Handspring might want to rethink that and start targeting its “always on” functions at the enterprise market.

RIM, for its part, may not be sweating too much over these new devices, but the opening salvos have been launched, analysts say.

“The window on RIM is closing,” says Kevin Burden, an analyst at IDC. “RIM has patented their technology, but other companies are slowly finding ways around it and will start offering similar features on their devices. RIM is definitely in the crosshairs of other vendors.”

Burden says the bigger problem for RIM is getting more devices in the hands of enterprise employees. The first wave of devices went to executives, Burden says, and hasn’t reached deeper into the organization. For full, widespread adoption, RIM needs to find a way to provide a solid return on investment (ROI).

“Just because you’re making someone’s life easier by giving them e-mail access on the road is not worth the investment to most enterprises,” Burden says.

To make it worth the investment, RIM must get better at having enterprises mobilize their applications for use on the devices. Applications like sales force automation and customer service will help bring some ROI back to the company, and land more devices in the hands of users.

And that could be an uphill battle. Every other device vendor, from Palm to all those Pocket PC manufacturers, is going to do the same thing. While RIM can partner with mobile application development companies (like iConverse, Wireless Knowledge or Brience, to name a few), it needs to build up its developer base, or the enterprises will flock to the other devices that can do more than just “always on” e-mail.

RIM needs to do this soon. With rumours of Palm coming out with a BlackBerry-like device and news swirling around that Microsoft is getting into the phone business (with its Stinger project), RIM’s uniqueness may soon go away.

What the company does with its closing window could determine whether RIM becomes a major mobility player or stays in the niche market with a device that has one great feature.