The BlackBerry once called RIM has a chance to keep its job, but this will require the firm use all its skills to ensure it can become synonymous with the network: in doing so it faces stiff competition from Apple [AAPL] and its software focus, and from Google’s forest of imitative device manufacturers.
[ABOVE: A little BlackBerry but the music's too much.]
Back to the future?
Along with BlackBerry 10 the company also introduced its new high-end handset, the Z10. It’s fair to say critical reaction to the device has been muted, but this shouldn’t surprise too many souls, as the focus in smartphone innovation is rapidly moving away from the device toward what it can do.
BlackBerry/RIM has always enjoyed an advantage in the mobile space on strength of its deep understanding of network-based services, as evidenced by its popular messenger service.
Apple’s iPhone loosened control of the carriers over the device and opened up the market to more intelligent products, spawning the new era of smartphones, imitated (though not on purpose) by others.
Apple’s success in changing the power politic of the mobile industry didn’t happen without the firm treading on a few toes -- like the music industry, carriers do not want to be in thrall to one big brand maker.
The LTE power exchange
Today’s march to ignite LTE networks worldwide is a big deal. That’s not just because of the promise of near-broadband speeds if you happen to be in an area with LTE coverage; it’s also because the nature of the standard opens up the chance for carriers to add intelligence to their networks.
In the present environment, carriers are witnessing the evolution of apps stores, sundry mobile services and other software evolutions on several platforms with little pleasure. Sure, these solutions create customers for their data rich products, but they are concerned the value of their networks is being reduced to that of being nothing more than dumb data pipes.
They don’t want to be dumb data, they want a slice of the action. That’s why as LTE evolves you’ll see operators engage on a quest to become more deeply involved in what you are doing with your mobile. They will attempt to add intelligence to their networks.
This intelligence may manifest itself as applications, services, never previously available pay-as-you-go features and deep (really deep) user demographics.
The latter of course is why Google is so interested in the mobile space as it works to make you, your life, friends, relationships and interests into a searchable commodity for advertisers and other agencies to sift through in search of specific interest groups to monitor or market at.
Service and software
In conversations with those involved in evolving Long Term Evolution, one example everyone uses as a notion of future services is that of the Turbo button.
This is the scenario: You are a pay-as-you-go user and you’re streaming a movie from some source. Your carrier’s network will detect that you are doing this and warn that you are edging close to your data limit. It will then offer you a chance to stream the film in HD without impacting your data limit and with a defined service quality -- for a fee. All you need to do is hit the Turbo button.
That's an actual application/service that's underpinned by the network.
You won’t see these implementations become too widespread just yet: Carriers are currently focused on building out their LTE networks and are offering aggressive ‘all-you-can-eat’ data deals as they seek to recruit users and evangelize the technology. However, most experts I’ve been speaking with predict you will see new subscription packages and services begin their emergence across the next 12-18 months.
So why is this a chance for RIM/Blackberry?
Short term advantage
The company enjoys good relationships with carriers, is fighting for its life and has a good understanding of the capabilities of network services. Given the firm’s strengths in the enterprise space, the marriage between switched-on LTE deployments and devices equipped with software designed to exploit network services, Blackberry is highly likely to abet carriers in their quest to wrest back some control over what happens on their networks.
The challenge BlackBerry faces is time. Yes, it has a deep treasure chest and high market value, but this iteration of LTE evolution won’t really become reality until late 2014 at the earliest. Apple will be offering up the iPhone 6S by then, and that company is big on software design. Wherever Apple goes, you can predict Android will also be visible -- that’s not to accuse the latter of being imitative, just to reflect that this is how the story has evolved so far.
The endgame will be a race as BlackBerry attempts to exploit its network service strength to deliver carrier- and customer- friendly new breed LTE services to its primarily enterprise markets.
Apple and Google’s focus on consumers may give BlackBerry and carriers a little elbow room, but as the boundary between consumer and enterprise markets continues to erode, it’s unlikely either competitor will resist the call for long. Microsoft, of course, is already doing its best to regain loyalty from its enterprise church.
BlackBerry therefore has a very short window of opportunity to jump into a leading edge position in terms of next-gen service provision. If it manages this then it will need to consolidate its position as swiftly as possible, as it is likely to see Apple and Google move in a similar direction. This leads me to conclude BlackBerry has a chance, but not a huge one, to improve its position in the industry.
However, Apple’s evident understanding that the perfect trio of world class design, bleeding cool software and a commitment to better deliver network-style services (no more Maps disasters) means there’s space for further innovation from Cupertino.
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