One of the unexpected news highlights of the US elections is Obama’s forceful battle to keep using his BlackBerry, which he won this week. The BlackBerry is a communications device built by RIM of Canada. I suspect Obama’s victory actually didn’t matter other than for his personal preferences, since these days several good substitutes are available, such as from Apple, Palm, Nokia and even Google.
Yet a few years ago, this wasn’t true. Dave Weston and I recently wrote a case study on the BlackBerry, and we learnt that in 2005, when RIM was told to shut down the BlackBerry network due to a patent infringement case, Washington DC insiders appealed to keep it running, claiming it was indespensible for the operation of the US government. Ironically, the US defense department cited National Security as the reason why the US government should be exempt from the shutdown — the same reason given now for why Obama should use a “more secure” device.
Only three years have passed, and while the BlackBerry is still the market leader, it is under serious threat. Customer satisfaction is lower than RIM might hope, and the recently launched BlackBerry Pearl is receiving unfavorable initial reviews due to glitches and buggy software. There are signs that the company isn’t particularly well run, for example when RIM was sued for patent infringement in 2000, its managers decided for a year that the best course of action was to simply ignore the lawsuit. On the developer side, there are also growing concerns. People I know who have tried developing software for the BlackBerry complain that it’s a nightmare, and it is much easier to develop applications for alternative platforms.
So, like for many firms that were once dominant in mobile telecommunications before them, RIM are now at risk of being overtaken. And once again, the main contenders are not brand-new firms, but existing firms with strong complementary skills, such as Apple with the iphone, and Google with the Android.