RIM's BlackBerry will prevail

Patent dispute just a temporary obstacle, says Tom Yager

Several patent hassles facing Research In Motion (RIM) will cost it a good deal of money to resolve, but speculation about the demise of the BlackBerry or its network service is a waste of time. RIM is a company that knows how to tough it out — it’s hung on through a lot worse than this. That seems easy to forget. The media also loses sight of the differences between the BlackBerry and other devices such as PDAs and smartphones with email capability.

RIM was working on embedded wireless solutions before it rolled out the cute and compact BlackBerry 850 and that original holstered brick with the huge screen, the 857, in the late 1990s.

RIM’s innovation — push messaging — was hard for consumers to get their minds around. In some ways it still is. The keys to BlackBerry’s push messaging are device-presence detection and guaranteed delivery regardless of changes in signal strength. You can wander in and out of coverage areas and even across carriers, and never get a garbled message or suffer the time-outs and chatty transfer protocols of devices that use polling to get their email.

BlackBerry manages this trick because all traffic is routed through RIM’s private servers. That’s the company’s secret weapon, and maintaining it is no easy feat. RIM’s network handles presence and signal-adaptable message transfer using efficient, secure, error-correcting proprietary protocols. This use of private servers is sometimes a source of ridicule, as it creates performance and connectivity disadvantages when it comes to web access. But RIM’s handsets are capable of connecting to cellular IP networks for general-purpose web traffic, a service that some carriers offer as a cost-plus option. Cingular added an alternative web browser to late-model BlackBerry phones that connects directly to its data network without interfering with the link to the BlackBerry network.

BlackBerry users are devoted. They shop around for mobile devices but once they get used to messages finding them instantly, they’re hooked. The handsets themselves are innovative, too. They’ve taken on speakerphone and Bluetooth headset capabilities, but the one-handed scroll/click wheel GUI and the comfortable keyboard were there in the 857 and persist with surprisingly few changes. I went to RIM’s site and downloaded the manual for the 857. The operating instructions still apply to modern devices.

Mobile wireless subscribers are at the mercy of operators that control devices, service plans and prices. The BlackBerry fits their business model perfectly. Every device on the street means a minimum of an extra US$40 (NZ$58) of revenue per wireless subscriber, and the operators don’t lift a finger to earn it. RIM plants the BlackBerry connectivity infrastructure at operators’ facilities and RIM manages it remotely. RIM supplies operators with service-ready handsets that don’t need to be discounted to sell, and operators don’t have to open their networks to uncontrolled, high-volume IP traffic.

As long as the BlackBerry stays ingrained in the hearts of users and the wallets of wireless operators, it will survive.

The unique formula that RIM devised seems a little archaic in the age of high-speed wireless IP connectivity, but the handsets and interfaces are exactly what users want and the externally-hosted service and technology are exactly what wireless operators want. That’s a formula for long-term survival.

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