That is where, 70 miles west of Toronto in Ontario, 19 nondescript,
low-rise office buildings comprise the headquarters of Research In
Motion, maker of the BlackBerry.
R.I.M.
is the North American leader in building smartphones, those versatile
handsets that operate more like computers than phones. But R.I.M. may
have trouble dominating the market’s next phase. Once the
exclusive domain of e-mail-obsessed professionals, smartphones are now
prized by consumers who want easy access to the Web, digital music and
video even more than an omnipresent connection to their in-boxes.
Since
the iPhone went on sale last summer, amid long lines of shoppers and
media adulation, the contours of the smartphone market have begun to
shift rapidly toward consumers. An industry once characterized by
brain-numbing acronyms and droning discussions about enterprise
security is now defined by buzz around handset design, video games and
mobile social networks.
That means R.I.M., which has
historically viewed big corporations and wireless carriers as its
bedrock customers, needs to alter its DNA in a hurry. While business is
booming in Waterloo, analysts are raising an important question about
R.I.M.’s future: Can a company that defined mobile e-mail for a
generation of thumb-jockeys with bad posture also dominate the new
consumer market for smartphones?
“The vultures are
circling,” says Roger L. Kay, president of Endpoint Technologies
Associates, a research firm in Wayland, Mass. “There is this
sense that the R.I.M. franchise is under assault.”
In the
short term, Apple’s noisy entrance into the smartphone market has
elevated the visibility of smartphones and enhanced the prospects of
most of its rivals. Worldwide, smartphone shipments jumped 60 percent
in the last three months of 2007 over the same period the previous
year, according to IDC, the tracking firm. Of the two billion
cellphones sold last year, nearly 125 million were smartphones —
a share that analysts expect to inexorably grow.
R.I.M. added
6.5 million subscribers in its last fiscal year, twice the previous
year’s amount, and its stock hit the stratosphere, more than
doubling in value as investors anticipated the coming Age of the
Smartphone. And R.I.M. has already introduced catchy mainstream
gadgetry. The BlackBerry Pearl and Curve, two phones aimed explicitly
at the consumer market, have sold well, particularly during the holiday
season, and now account for a majority of R.I.M.’s device sales.
But
there are also signs that R.I.M. faces steeper challenges. At the end
of last year, BlackBerry had a 40 percent share of the United States
smartphone market, down from 45 percent at the end of 2006, thanks
largely to the 17.4 percent share the iPhone grabbed in its first six
months.
In March, Mr. Jobs announced that Apple would take the rare step of licensing Microsoft’s
corporate e-mail technology, to allow iPhones to connect directly to
business computers — a dagger aimed at the heart of
R.I.M.’s strength in the corporate market. In Apple’s
quarterly conference call last week, Apple executives said that
one-third of Fortune 500 companies were interested in giving iPhones to
their employees.
Apple, meanwhile, in an effort to further
increase its appeal to consumers, is also expected to introduce a new
3G version of the iPhone in June, which will work on speedier wireless
networks and may further attract a new segment of customers to the
iPhone in the United States and abroad.
In describing the threat
that Apple poses to R.I.M., Charlie Wolf, an analyst at Needham &
Company, describes his wife’s entirely common use of the iPhone,
which she takes to bed with her each night to browse the Web.
“Some
consumers who might have considered the BlackBerry, who don’t
have the e-mail urgency of a mobile professional, are going to start
selecting the iPhone,” Mr. Wolf says. “This isn’t
going to stop R.I.M., but it is going to slow them down.”
Continues : http://www.nytimes.com/
