The iPhone and the BlackBerry

About the time the iPhone first appeared five years ago Friday, I recall having a dinner with friends and somebody said, "What exactly is a smartphone?"

At that time, in 2007, many executives and others knew what a BlackBerry was, but they didn't understand the iPhone or what a smartphone was. BlackBerry devices were called phones or email devices or  Crackberries or PIMs (Personal Information Managers) and many other things.

But they weren't being seen as smartphones partly because they didn't have a touchscreen, even though they were highly trusted messaging devices for email and had a fairly robust processor and operating system.  Enterprises, doctors, lawyers, and others loved BlackBerry devices with their chicklet keyboards and tiny screens partly because of the BlackBerry Enterprise Server kept in the data center and the inherent security it provided to the end-user devices.

Even with all of BlackBerry's popularity five years ago, the subsequent years have taken an almost tragic toll on the devices.

Here's irony:  Friday, five years after the first iPhone went on sale, BlackBerry's maker, Research in Motion, saw its stock price plunge 19%. Many analysts wondered how the Canadian firm could survive. The drop came after RIM declared the day before that it saw a $518 million net loss in its first quarter. Nearly one-third of its workers would be laid off.  More important to users: the BlackBerry 10 OS and smartphones would be delayed into 2012, putting delays for BB 10 nearly a year after they were first promised.

The shift away from BlackBerry has many causes, but probably the biggest is how the devices haven't adapted quickly to a quality touchscreen and  a quality browser. Workers started bringing iPhones and Android phones to work with great touchscreens and browsers and a plentitude of apps. They used them for work-related tasks even when IT shops preferred they use the more secure BlackBerry.

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It hasn't helped matters that RIM had network outages, including one nearly-global one last year that frankly freaked-out many IT pros in government and business. One state government revenue official told me that her auditors couldn't communicate for several days with their BlackBerry handsets during the outage, a completely unacceptable situation.

So, BlackBerry is not at all healthy, while the iPhone has emerged as the single bestselling smartphone model in the world, even if Android in many different models runs in half of the smartphones. IDC put the global share of BlackBerry at just over 6% in the first quarter of 2012, about half what it was a  year earlier.

Some analysts see hope for BlackBerry in emerging markets, but not so much in the U.S. and Canada. RIM is going through a massive restructuring and remains committed to BlackBerry 10, but it might come out too late for many diehard BlackBerry fans. (Yes, there are some fans, but they aren't as devoted as, say, Chicago Cubs fans.)

RIM needs to license its OS and probably even lease out its network, so that other smartphone providers can use its network operations center (NOC) to secure their smartphones the way RIM does.  And RIM could even try adopting Android as an alternative to the BlackBerry OS, putting Android devices through its NOC to batten down the hatches.  

But all those ideas might take too long to implement, and many financial analysts are putting their best hope for RIM  in some kind of quick merger or acquisition. Yes, it's that bad.  

Meanwhile, Apple's prepping another iPhone...Android is now at version 4.1, and Samsung is going strong with a variety of great devices... Microsoft has announced Windows Phone 8...These are the invaders.

RIM's BlackBerry fortress, long under attack, is being breached.

Copyright © 2012 IDG Communications, Inc.

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