pyehouse
12Oct/110

BlackBerry Dying On the Vine

I almost feel sorry for RIM. It's bad enough that what was once the golden child of the smartphone world, at least among business users, is now being taken out back by these upstart iPhones and Androids, but now the reliability of their centerpiece, their BlackBerry Messenger service, is being called into question due to an outage that is going on three days and is affecting world wide communications among its users.

The Register reports ongoing problems despite RIM's reassurance that all is well. And they note that the most affected are non-BES users, those who are perhaps on individual plans or business users who operate with smaller companies that can't afford their own BES server, even the free BESX variant. Given that the competition is moving in on RIM's turf because of their popularity with just this crowd, this isn't going to give RIM any traction to fight off the relative newcomers. Additionally, it seems some BES users also appear to be affected, further eroding support for the platform. But the worst part of all of this is the continuing denial on RIM's part that anything is wrong.

It's one thing to admit that you are not sure what is causing the problem. That is bad but given the complexity of a system with the size and scope of the BlackBerry Messenger service, it's believable. It's also understandable if you point out that you think you have the problem licked but that you are waiting to know for sure. It's almost commendable if you then enlist your customers, asking them to let you know of any further feedback "to assist in troubleshooting" the issue. But to keep telling the world you've got it fixed, only for the world to reply that, in fact, you do not... that shows not only a continuing technical ignorance about the problem but a completely myopic approach to customer relations that is only going to further alienate a shrinking customer base. RIM can ill afford to lose more customers over something that was supposed to be their strong suit.

In fact, there has always been a longstanding argument that the BlackBerry was the only enterprise-worthy smartphone, that the others simply weren't ready to play in a big corporate environment. RIM could point to two things, the manageability of their devices in a corporate environment and their relative stability, as points of comparison with their rivals which made RIM look like the better choice. Well, the manageability side has been less of a comparison point given the options available for iPhone and Android devices in the corporation and now the stability of RIM's services is being called into question. Overall, not a good week for RIM.

The best thing RIM can do now is admit the problems are ongoing rather than trying to cover them up and, of course, fix the problem. But if they continue with their head in the sand approach, when they come up for air they may find they're left standing with far fewer customers than when they started.

28Sep/110

Kindle Fire vs RIM PlayBook

John Gruber, at DaringFireball.net, in a post about a comparison between the Kindle Fire and RIM's PlayBook, quoted Ryan Block regarding the Kindle Fire's resemblance to the PlayBook:

From there, Amazon’s team determined they could build a tablet without the help and experience of Lab 126, so they turned to Quanta, which helped them “shortcut” the development process by using the PlayBook as their hardware template. Of course, it’s never quite that simple, and as I’m told Amazon ran into trouble, and eventually sacrifices were made (like using a slower processor).

Although Amazon did refresh the ID of their PlayBook derivative, I’m told that this first tablet of theirs is “supposed to be pretty poor” and is a “stopgap” in order to get a tablet out the door for the 2011 holiday season — which doesn’t exactly leave the best taste in my mouth.

John then follows up by asking:

My question, though: if it’s based on or even just very much similar to the BlackBerry PlayBook, why is the Kindle Fire only $199 and the PlayBook started at $499?

My response: Amazon is hoping for a halo effect, subsidizing a reduced cost tablet, perhaps sold at or even below cost, with the expectation of additional revenue from services provided by the tight integration of the Kindle Fire with Amazon products and services. This halo effect, which is something Apple has counted on with their hardware products, selling Macs and Macbooks because users purchase iPods and iPhones, is also something RIM never counted on. RIM never had services they could push toward PlayBook users which would grow revenue beyond the simple sale of the hardware.

I actually mentioned the idea of Amazon subsidizing Kindle Fire through service revenue a few weeks ago. What makes sense for Amazon didn't for RIM, and I think for anyone trying to break into the tablet market against the iPad, they're going to have to provide a clear improvement on price because the quality and content aren't likely to be matched or beaten well enough to make a difference. And for that to hold true, someone's going to have to take a loss on the hardware and make it up elsewhere. Amazon is one of the few who can do so at this point.