RIM Blackberry Could do Extremely Well
I remember a time when Apple was such a loser company I actually hoped they would go under. The story was tiring. Just one newly designed cheapo Mac after another, always at a premium to market prices. Unless you were a hardcore graphics artist who already knew the Mac there was no reason for its existence. Slowly, as they began to embrace the PC world of business and allow Windows compatibility, the Mac began to have a place in the world. Re-enter Steve Jobs.
iPod. Need I say more? It just was the right product at the right time, bringing branding to the marketplace, something Apple needed badly. But the iPod wasn’t enough and the iPhone came into being, which is the true success story of Apple after all these years. It is still to be seen whether they will fully capitalize on the platform and become a true power in the computer world. At this point, lets take a step back in time to the days leading up to the iPhone and its impact on Apple’s earnings, since this is a clue as to why Blackberry could do much better than expected.
Most people won’t remember the condition Apple was in when they launched the iPhone. Prior to the iPhone’s intro Apple had been relegated to the pasture of PC wannabes and one-off fad products (iPod). The company had struggled back from the brink of collapse and built a new future because of the continuing use of the Mac, meaning sales, and the sudden influx of earnings from the iPod. Jobs and the crew did a smart thing, they took the quick hop in financial strength and capitalized on it by investing in what they envisioned as the future, portable computing via smart phones.
The iPhone had the effect of taking Apple from a $40 Billion company to a $324 Billion company today. I remember vividly prior to the launch of the iPhone that a report using percentage market share data showed that Apple would probably double if they only captured about 2% of the marketplace. What nobody was paying attention to was Apple already had enough installed hardware with passionate users to easily obtain that goal. It happened very quickly. The lesson learned here is that a key product launched into a current user group can have a geometric impact on economies of scale for the company. Apple sprang to life and became a world power through the application of technology now taken for granted by nearly everyone.
RIM’s Blackberry has a similar story in play right now. But there are some key differences as well. The first thing to understand is that Blackberrys are everywhere and not hidden in graphic art closets like the Macs were. The Blackberry phones are very strongly embraced by corporations around the world for several key reasons. First, they are about as lock-tight safe for communications as you can get, even causing some third-world countries to attempt to ban them, because the governments couldn’t hack into the phones. Second, Blackberrys are fantastic for productive communication of documents, texts, and other attachments, and especially with multiple email accounts. Few smartphones can match the productivity of the Blackberry. And third, the server platform offered by RIM is second to none in allowing companies to truly control use and abuse of their prized communication systems. That’s a strong position to be in.
Often a company will introduce a new product only to see someone else provide a better version later and potentially knock them out of the business. Although I don’t feel Apple could be knocked out of the business with the new iPad, I do feel that RIM could do them one better with the new Playbook they are introducing. The new aspect for the Blackberry is the design of the Playbook incorporates it as a tethered device to the Blackberry. Some have criticized this move, stating that the Playbook needs to be open rather than strapped to the Blackberry. I say RIM made a good move in first taking care of their installed base. The Playbook will likely have a wi-fi version as well, but in truth it seems the best utilization of the Playbook is with a Blackberry smart phone.
Doesn’t make sense? Imagine that you own an iPhone and an iPad. If you want cellular service and not just wi-fi for the pad, then you need to cellular plans. The Playbook requires only one plan. The Playbook isn’t a laptop replacement like the iPad, but instead is seen best as an enhancement of the Blackberry, allowing you to be on the phone and surfing freely with the pad. Whatever you do with the Playbook is also instantly synced into your phone… email, web pages and tabs, contacts, content and more. The Playbook pad is a leap forward for the Blackberry phone and is likely to be sold very quickly to a high percentage of the installed customer base. It will likely be seen as an essential business productivity device, which will likely be purchased by companies. The iPad is really a different product with a different consumer in mind and does not have nearly the potential for business. If you could calculate the numbers regarding the potential impact of the Playbook, the answers could be astonishing.
This is a great lesson to business owners and entrepreneurs. If you have an installed base of happy customers, focus on launching a new product which will enhance service and productivity. You may find your business booming!