Good wishes for BB10 not enough for RIM

If good wishes were money, Research In Motion would be awash in billions.

Carriers, software developers, organizations and industry analysts express a lot of good will for RIM, which unveils its bet-the-company BlackBerry 10 operating system and new large screen handsets on Wednesday.

That will be the first time buyers will actually see the closely-guarded size and shape of two new touch-screen handsets. They will actually be in buyers’ hands not long afterwards. A BB10 device with a physical keyboard is weeks away.

But what the company needs are orders, not best thoughts.

RIM will rely on people like Leigh Popov, CIO of Toronto-based Bayshore HealthCare Ltd. for its success.

Bayshore supplies thousands of BlackBerrys not only to executives but also its home care nurses and therapists in nine provinces.

Popov likes the device, but he won’t be buying in volume immediately.

“I’ve been waiting anxiously for this device,” he said in an interview. “I’ve had a pre-release version since December I’ve been playing with, and I think it’s a solid piece of hardware. It’s good software … I think RIM is on to something.

“However, when it comes out it’s going to be priced at a premium. You’re not going to be able to get thousands of field staff on it right away. They haven’t released pricing yet, but all indications and rumours are that they’ll come out at somewhere in the range of $700 without a contract, or they’ll be $200-$300 with a contract and a hardware subsidy. That’s high for replacing thousands of devices. So we’ll probably wait for doing mass upgrades until those devices come down in price so they become sub-$100 devices on a subsidy.”

On the other hand, there’s a smaller number of management and administrative staff.

“So I could see us doing few hundred right away” for them, Popov said. “But I just can’t see us doing a few thousand until those prices come down.”

That’s the good news for RIM. The bad news is a number of businesses and government customers don’t care: their staff have already moved off BlackBerry to Apple iPhone or Android-powered devices thanks to BYOD policies. For them RIM is late.
In fact it’s a year late – BB10 was originally promised to be delivered this time 12 months ago. However, RIM executives said it wasn’t ready then.

A year ago it would have faced an uphill battle against iPhone and Android handsets in a bid to get enterprise users and so-called pro-sumers. The task isn’t any easier today.

In December following the release of RIM’s latest quarterly financial results, financial analyst Michael Walkley of Canaccord Genuity wrote investors that there’s a “very low probability the market will support RIM’s new mobile computing ecosystem.”

At the time he believed there will be a short-term sales bounce from BlackBerry 6 and 7 users wanting to upgrade, but facing pressure from low-cost Android smart phones BB10 can’t return RIM to what he called “sustainable profitability.”

His prediction: The Waterloo, Ont.-based company will be sold. Whether it will be cut into pieces or be only a niche player was unsaid.

On the other hand, others are seeing light around the corner. They praise new CEO Thorsten Heins’ steady hand and ability to execute his business plan after taking over from co-CEOs Mike Lazaridis Jim Balsillie and just over a year ago.

The optimists are betting BB10 will give RIM a second life, although that doesn’t mean it won’t be sold.

But hopeful signs include increasing work from software developers creating new BB10 apps or converting existing ones to the new platform.

“There’s definitely a lot of interest out there,” in BB10, says Deepak Chorpa, CEO and co-founder of Clearbridge Mobile Inc., a Woodbridge, Ont.,-based mobile application developer whose clients include other software companies and what he described as major U.S.-based media companies. “And the interest is getting stronger.”

About six months ago two-thirds of its work was developing apps for Apple’s iOS platform, while the rest was for Android, he said. Today, work on apps for the three operating systems is roughly equal.

“BlackBerry 10 has become one of our biggest revenue drivers in a short time, Chorpa said. “We see that momentum continuing through the rest of the year.”

In addition to doing work for customers, Clearbridge is creating apps to “show off the platform” to potential customers – for example, the way all messaging is managed through BlackBerry Hub, the ability to “peek” at an incoming email to catch its essence and then “flow” into it from any open app.

“We think the BlackBerry 10 platform will get Research In Motion back in the game,”
he said. “By launching the newest platform they’ll have one of the most advanced platforms … There’s definitely an opportunity to grab back a number of the BlackBerry users that have left the platform in the last couple of years,” he said, and gain new users on top of that.

Not surprisingly, industries or verticals committed to BlackBerry are eager to see the final product.

Gary Bauer, CEO of Toronto’s Mobile Innovations, a small developer ($1 million annual sales) which specializes in BlackBerry apps for handsets and Playbook tablets for law enforcement agencies, just returned from a RIM-sponsored conference in Amsterdam for European police departments where he said there’s “a high degree of enthusiasm about receiving these devices.”

In the Netherlands alone about 25,000 police officers use BlackBerrys, he said, and they want to know “did I bet on the right horse?”

On this side of the ocean, there’s “huge” interest among Canadian police forces in BB10, he says.

RIM did a good job at the show, he said, meeting worries of officers from several countries who wonder if they can adapt from a handset with a physical keyboard to a touchscreen.

“Every agency that we are working with is looking to take possession of small number of these in a trial capacity, and most have already put in place BES 10,” the new BlackBerry Enterprise Services mobile management suite. That means they have their infrastructure ready.

“We have seen a significant increase in demand in customers who are interested in moving their existing applications to BB10 to make sure they’re ready for the launch,” says Glenn James, a principal at the New Toronto Group, a mobile software development and consulting house.

“That’s been growing for the past several months, and we anticipate after the launch this week that it will continue to be strong fort the next several months.

“After that, I don’t think anyone is sure.”

A shop that now specializes in building apps in HTML5 for multiple platforms, he estimates that 40 per cent of the company’s work is BB10-related.

On the other hand, this may be telling: James’ company’s biggest client is automaker Chrysler Group, for which it has been developing an application for hundreds of service technicians. It likely won’t be deployed on BB10, James said.
Another sign: Customers of one of the largest mobile app creators, Toronto-based Polar Mobile, haven’t asked for their applications to be converted to BB10 reports CEO Kunal Gupta. “Our customers are some of the biggest media companies in the world,” he said, “and their focus is on the major platforms” — Android and iOS. A lot of the customers have apps for BB6/7, he added, but aren’t interested yet in spending on converting them to BB10. “Things could easily change once there’s a proven audience on BlackBerry 10,” he added. A tipping point would be at least 15 per cent of a customer’s Web site traffic coming from BB10 handsets.  

So RIM’s future depends on buyers to at least bring it back to profitability. But it has to be solidly profitable – barely profitable won’t do.

The fact is CEO Thorsten Heins is gambling BlackBerry 10 can at least stabilize the company to broaden its options – perhaps a handset maker will see some potential and add BB10 handsets to its lineup. Samsung, for example, sells Android and Windows Phone 8-based handsets. Perhaps another kind of partnership.

However, no one is predicting that RIM [TSX: RIM] will soon displace leaders Apple or Samsung.

Says Bayshore’s Leigh Popov: “It’s going to be a tough slog for them.”

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@]

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