Is BlackBerry Back?

It is not necessary to be in the top four device suppliers to make a decent profit in the wireless world. BlackBerry has a good start and its new goal is to capitalize on what it does best: Build best-of-breed, keyboard-centric devices that are on the most secure wireless business platform on the planet.

The new CEO at BlackBerry (the renamed RIM) stated recently that it is back to keyboards for the BlackBerry. To me that is great news. I still carry a BlackBerry (Q10) today as I have every day of my life since before the BlackBerry’s introduction in January of 1999. Before I tell you why I think BlackBerry will return, a look back in time is in order. (The disclaimer: Over the years I have owned small amounts of BlackBerry (RIM) stock, but at present I have no holdings nor am I working as a consultant to BlackBerry.)

In 1991, a small Silicon Valley company called RadioMail went live with the first wireless email system. The devices were an Ericsson Mobitex Modem (a wireless data technology pioneered by Ericsson) coupled with a Hewlett-Packard HP-95LX handheld computer inside a nice leather case. The system worked well. When you wanted to check your email you opened the case, turned on the modem and the handheld computer, signed onto RadioMail, and soon email sent to your RadioMail address or forwarded from your desktop email address began to arrive. When you answered the email, it was sent out with your RadioMail address in the sender line. If the email had been forwarded from your desktop, the recipient was likely to hit reply and the new email would be routed to your RadioMail address rather than your desktop email address.

This was confusing to many, and oftentimes you might not receive the reply because you were back at your desk and not using RadioMail. A few years into the RadioMail experience, I wrote an article discussing the “Two Mailbox Problem” with wireless email (Andrew Seybold’s Outlook on Mobile Computing, Volume 1, Number 12, Page 32 December 1993). A few years later, I received a call from the co-founders of Research In Motion (RIM) asking me to come to Waterloo, Canada right away to see something they were working on. When I arrived, I was shown what looked like the existing RIM 950 two-way pager that ran on the RAM/BellSouth Mobile Data network. I carried a 950 and liked it a lot, but it suffered from the same two-mailbox problem that plagued RadioMail a few years earlier.

However, I was told that this new device fixed my two-mailbox problem and that email that showed up on the device (still on the RAM/BellSouth network) and that was sent from the device looked as though it had come from the user’s desktop email address. I spent several days in Waterloo exploring the product and the service, learning a lot about the system and the fact that the data was encrypted from the device across the network until it was delivered and vice versa. I was given a device, soon to be named “BlackBerry” because it was black and had dimples in the plastic case that resembled the skin of a BlackBerry. I still have this first BlackBerry with no serial number and my collection includes one of almost every model produced by RIM over the years.

I loved this new device. I installed the desktop software on my computer, obtained an account from BellSouth for the then speedy network (8 Kbps), and began reading and responding to my email almost no matter where I was. The RAM Mobile Data network coverage was pretty darn good in major metro areas since it had been designed mostly for corporate service personnel, and the signal penetrated buildings pretty well. I was hooked. In fact, I was so hooked that for a few years, until I was called on it by several people, every time the BlackBerry vibrated on my belt I would stop in mid-sentence, or mid-listening, and read my email. I became a fanatic about answering my emails right then and there. Experience has since taught me that not only was this very impolite, it gave people sending me emails the expectation that I would respond almost immediately. Hindsight is 20/20 and most people now know how to use wireless email during their down time and not in the middle of a meeting, a meal, or a conversation.

While I was going back reading some of my newsletters about wireless data happenings in the 1990s, I came across an article on the dual-mailbox problem as well as this statement I made first in a newsletter and then in a book I wrote that was published in 1994:

“Smart Phones or Wireless Computers?

If “millions and millions” of these devices are going to be sold, if everyone is going “wireless,” the next question is whether everyone will be carrying smart phones or wireless computers. The next step is to define the differences between a smart phone and a wireless computer.

The most obvious difference is that a smart phone is a voice device with some data capability that uses an onboard computer to add functionality. In this model, an executive who now stands at a pay phone in the airport with a daybook, notepad, and several file folders to conduct business will use this one device to accomplish all of these tasks: looking up a number, dialing the call, checking a calendar, accessing customer files, and updating information as he or she talks.” And then I went on to describe a wireless computer as a full-function laptop with wireless capabilities added to it or built in.

This statement is also applicable to the first BlackBerry. It did not offer voice services (that came later) and it was a data-only device but it did enable the syncing of your email, desktop calendar, and address book. The Simon marketed on the BellSouth cellular network and built by IBM was really the first smartphone, but the BlackBerry got a lot of features and functions right in 1999.

RIM On Top of the World and Then Not!

In 1999 and into the early 2000s, the BlackBerry was the device to carry. RIM wanted to make it the most secure wireless device available and worked diligently at its encryption schemes. I was working with RIM at the time as a consultant and it selected one company that was known for the tightest computer security of the time—Intel. The Intel IT shop was fanatical about making sure its wired networks were secure and was not about to let wireless devices connect to these networks until they had been proven. It took months of convincing, but soon the BlackBerry was approved for use and began showing up on hundreds of Intel employees, just as it did at Microsoft, Compaq, Dell, HP, and many other technology companies. BlackBerrys were even being carried at Apple since they were smaller and lighter than the Apple Newton and they offered more functionality.

But it was not until 2002 that RIM came out with its first BlackBerry that included voice and it was first sold in Europe on the GSM 1G system. I remember RIM having a problem coaxing the GSM system to work with its email, calendar, and phone book services and it took some real collaboration between the GSM equipment vendors, network operators, and RIM’s engineers to finally make it work. Still, it was not until 2004 that RIM sold its millionth BlackBerry. BlackBerry was a corporate business tool, not designed for Joe Consumer, and it worked best with Microsoft Outlook when a RIM server (which was expensive) was added to the Microsoft Exchange Server.

In 2007, three pivotal things that affected the then RIM company happened. First was the January announcement of the first iPhone, second was that RIM reached the 10 million-subscriber mark in October, and then in November, Google unleashed Android, a royalty-free operating system. The advent of the iPhone and the release of the Android operating system would take their toll on RIM. At this point, RIM was releasing products such as the new Bold that were designed not only for the corporate world, but to entice consumers into the RIM family as well.

In 2011, RIM attempted to enter the tablet business (the first iPad was introduced in 2010). The RIM Playbook was not met with much enthusiasm since it really needed to be attached, via Bluetooth, to a BlackBerry, and when introduced it was not yet ready for prime time. From that point forward, RIM, now BlackBerry, has been bleeding money, been late to market with new products (BlackBerry 10 series), lost or fired a number of executives, banished its founders, and has been through several CEOs and other top executives.

BlackBerry—Will It Survive?

I have been bullish on BlackBerry since the start, most likely because the BlackBerry was conceived by some very smart folks who read my complaints about wireless email, took them to heart, improved on them, and hit a home run. As mentioned, I have carried a BlackBerry since my first one was given to me prior to the product launch in 1999, and I have become very efficient at using the keyboard with my thumbs. I also own an iPhone and I have constant trouble with the on-screen keyboard. Even with the self-correcting keyboard feature, I am not nearly as fast with an on-screen keyboard as I am with the well-designed and well thought out BlackBerry physical keyboard. I watch people who seem to have no problem with the iPhone or Android device keyboards, perhaps I have simply not used my iPhone enough, but I can still be much more productive with my BlackBerry.

Also, I don’t trust the Android operating system as being secure or safe; malware is rampant in the Android world. Google’s idea of an app store, it seems, is not to pre-test or verify applications but to simply put them up so it shows impressive numbers. At least Apple verifies all of its apps. I feel comfortable with the BlackBerry end-to-end encryption. I trust it, and I am not concerned about it since I have seen no reports of it being hacked, only reports that in some countries BlackBerry has had to provide access to governmental agencies. My Q10 is okay, not as good as my BlackBerry bold, the touch screen is more difficult to learn, the synchronization is active sync, which I am not convinced is as secure as using a BlackBerry server, but still I use it and I am learning my way around it.

Going Forward

BlackBerry is both its own victim and a victim of the times. The iPhone, Android, broadband wireless services, the iPad, Samsung, Motorola, LG, and other smartphone vendors outdid BlackBerry at every turn. The BYOD (Bring Your Own Device) craze that has permeated the corporate world was also an element in the demise of BlackBerry, and Apple and the Android folks seem to have convinced corporate IT that people want their own devices. Thus corporate IT has bowed to the masses, even if the IT shop now loses control over software revisions and phones on the corporate network are not as secure as they once were.

The founders of RIM, and I have a huge amount of respect for them, totally missed what was happening. Once the company realized this, its response was too slow, the products were not the typical world-class RIM products, and it was acting in crisis mode as opposed to the mode it had been accustomed to operating in, which was “watch us, follow us, we are the trend setters and the leaders.” When a company goes from a leadership role to one of being on the defensive, and begins operating in crisis mode, mistakes are made, straws are grabbed at, and decisions that would not have been made a few months or a year before are made.

I have yet to see any company truly recover from a crisis mode of operation to its former robust self. However, I do believe that BlackBerry has a chance to regain a place in the market. Over the next few years as the Internet becomes increasingly prone to attacks, as more corporate firewalls are breached, as utility companies, businesses, and government agencies (including the NSA!) continue to fight smarter and smarter hackers, the opportunity for BlackBerry and its secure method of data encryption and transmission is there to regain popularity. I am certainly not suggesting that BlackBerry will retake its leadership role in the wireless device market. However, it went from a profitable niche player, to a very profitable industry leader, to an also-ran in only a few short years. It can do well as a named player in the top ten suppliers of devices and make money for its stockholders at the same time. BlackBerry has trimmed the fat, tightened its belt, and it can flourish as one of the top ten players.

It is not necessary to be in the top four device suppliers to make a decent profit in the wireless world. BlackBerry has a good start and its new goal is to capitalize on what it does best: Build best-of-breed, keyboard-centric devices that are on the most secure wireless business platform on the planet. There is no reason it cannot return to basics and thrive. For my part, I am waiting for my next BlackBerry and the day I can retire my Q10 to my display case of BlackBerrys, which I hope will continue to grow over the coming years.

Andrew M. Seybold