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The BlackBerry still dominates in the corporate world, but the iPhone gets all the love. That leaves RIM's co-CEOs struggling to be heard
ByDiane Brady andHugo Miller
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The PlayBook could be great, but will anyone get the message?
When Apple (AAPL) Chief Executive Steve Jobs unveiled the iPad last January, he took the stage in his inevitable jeans and mock turtleneck, and held his new tablet computer like a precious jewel. The device, he told the crowd, was a "truly magical and revolutionary product," something "extraordinary" and "unbelievably great."
Jim Balsillie, the co-CEO of Research In Motion (RIMM) (RIM), has a different approach. When he came through New York on Sept. 24 to introduce the BlackBerry PlayBook, his company's answer to the iPad, Balsillie wore a gray suit and a tie covered with ducks. Kicking off a visit to Bloomberg Businessweek, he said: "There's tremendous turbulence in the ecosystem, of course, in mobility. And that's sort of an obvious thing, but also there's tremendous architectural contention at play. And so I'm going to really frame our mobile architectural distinction. We've taken two fundamentally different approaches in their causalness. It's a causal difference, not just nuance. It's not just a causal direction that I'm going to really articulate here?and feel free to go as deep as you want?it's really as fundamental as causalness."
Those words?brilliant, no doubt, if you could only figure out what they meant?illustrate the promise and peril of RIM. On a technical level, the PlayBook may well be better than the iPad. It boasts a seven-inch screen, the same security features that made BlackBerry famous, dual cameras, and support for the Adobe Flash technology that underpins most Web sites. Morgan Stanley (MS) analyst Ehud Gelblum wrote that its technical features appear "to outperform competing device hardware on nearly every metric." If Balsillie and his team can't sell it, however, none of that will matter. And RIM hasn't had much luck generating excitement among investors lately. The Waterloo (Ont.) company's stock is down 37 percent since its high in March, to $48.01, on Oct. 6. Its U.S. sales dropped 2.9 percent in the last quarter, to $2.2 billion.
Of course, it's hard to compete with Apple?and it doesn't help when your leader has a hard time making his vision understood. Ask Balsillie if management's message might seem a bit cerebral and he responds that it's "authentic." Maybe so, but RIM's recent product launches have underwhelmed reviewers, and nobody knows how well the PlayBook really works because Balsillie's partner, co-CEO Mike Lazaridis, didn't demonstrate its functions at the official launch on Sept. 27. Devotees of the iPhone like to dismiss the BlackBerry as outdated, one-dimensional, and as sexy as a mid-1970s calculator. Yet RIM's problems don't begin and end with Steve Jobs. While Apple's second-quarter global market share rose to 13.1 percent from 12.4 percent the year before, according to IDC, it was Google's (GOOG) Android operating system that truly surged, rising to 15.8 percent from 2.3 percent. (RIM came in at 17.5 percent.) What Android and the iPhone have in common are operating systems that encourage third-party applications, allowing users to customize each phone with mobile apps that do everything from tracking ocean currents to locating nearby pizza parlors. It's an arms race in which RIM hardly competes. The iPhone has about 250,000 consumer apps, and Android about 75,000; BlackBerry has just over 10,000.
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ByDiane Brady andHugo Miller
Browse Issues
Browse the BusinessWeek Archive
The PlayBook could be great, but will anyone get the message? When Apple (AAPL) Chief Executive Steve Jobs unveiled the iPad last January, he took the stage in his inevitable jeans and mock turtleneck, and held his new tablet computer like a precious jewel. The device, he told the crowd, was a "truly magical and revolutionary product," something "extraordinary" and "unbelievably great."
Jim Balsillie, the co-CEO of Research In Motion (RIMM) (RIM), has a different approach. When he came through New York on Sept. 24 to introduce the BlackBerry PlayBook, his company's answer to the iPad, Balsillie wore a gray suit and a tie covered with ducks. Kicking off a visit to Bloomberg Businessweek, he said: "There's tremendous turbulence in the ecosystem, of course, in mobility. And that's sort of an obvious thing, but also there's tremendous architectural contention at play. And so I'm going to really frame our mobile architectural distinction. We've taken two fundamentally different approaches in their causalness. It's a causal difference, not just nuance. It's not just a causal direction that I'm going to really articulate here?and feel free to go as deep as you want?it's really as fundamental as causalness."
Those words?brilliant, no doubt, if you could only figure out what they meant?illustrate the promise and peril of RIM. On a technical level, the PlayBook may well be better than the iPad. It boasts a seven-inch screen, the same security features that made BlackBerry famous, dual cameras, and support for the Adobe Flash technology that underpins most Web sites. Morgan Stanley (MS) analyst Ehud Gelblum wrote that its technical features appear "to outperform competing device hardware on nearly every metric." If Balsillie and his team can't sell it, however, none of that will matter. And RIM hasn't had much luck generating excitement among investors lately. The Waterloo (Ont.) company's stock is down 37 percent since its high in March, to $48.01, on Oct. 6. Its U.S. sales dropped 2.9 percent in the last quarter, to $2.2 billion.
Of course, it's hard to compete with Apple?and it doesn't help when your leader has a hard time making his vision understood. Ask Balsillie if management's message might seem a bit cerebral and he responds that it's "authentic." Maybe so, but RIM's recent product launches have underwhelmed reviewers, and nobody knows how well the PlayBook really works because Balsillie's partner, co-CEO Mike Lazaridis, didn't demonstrate its functions at the official launch on Sept. 27. Devotees of the iPhone like to dismiss the BlackBerry as outdated, one-dimensional, and as sexy as a mid-1970s calculator. Yet RIM's problems don't begin and end with Steve Jobs. While Apple's second-quarter global market share rose to 13.1 percent from 12.4 percent the year before, according to IDC, it was Google's (GOOG) Android operating system that truly surged, rising to 15.8 percent from 2.3 percent. (RIM came in at 17.5 percent.) What Android and the iPhone have in common are operating systems that encourage third-party applications, allowing users to customize each phone with mobile apps that do everything from tracking ocean currents to locating nearby pizza parlors. It's an arms race in which RIM hardly competes. The iPhone has about 250,000 consumer apps, and Android about 75,000; BlackBerry has just over 10,000.
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