Technology July 7, 2010, 11:01PM EST

RIM Needs a Lift with BlackBerry 6

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Because of their strong security features and data capabilities, BlackBerrys have long been the handset of choice for companies. CTOs don't typically covet or even welcome fun features like games and video apps for their workers. But ever more buyers want their companies to support the iPhone and other similar devices. Mike Kourabas, an attorney at Weil, Gotshal & Manges in New York, uses an iPhone for personal calls and a BlackBerry at work. If the firm supported the iPhone, "it'd make my life easier," he says. "I wouldn't have to carry around two phones."

A Goldman Sachs (GS) survey of global IT managers, published on July 1, notes that more companies are willing to indulge the likes of Kourabas. It reports that RIM saw "significant erosion" in interest among tech managers. Only 59 percent of respondents plan to issue new BlackBerrys over the next 12 months, down from 84 percent in December. PayPal, for instance, has gone from all BlackBerrys two years ago to about half iPhones today. "For us it's about being open-minded," says technology chief Scott Guilfoyle. Balsillie acknowledges consumer pressure in the business, but insists it's overstated.

Consumer Challenge

The big challenge for RIM is to woo consumers, who are fueling global demand for smartphones. To do that, the company needs to focus first on software developers like Wade Beavers, whose Minneapolis company DoApp has built 142 apps for iPhone, 130 for Android, and, he says, "no more than seven" for BlackBerry. Beavers complains that RIM is hard to work with because programs need to be tweaked for its different devices. Moreover, he says, interest in apps among BlackBerry users is so limited that it's hard to make money from the programs he does write for it. "Developing for RIM is just a waste of time until they can show there's an appetite for apps on their platform," Beavers says.

Balsillie and co-CEO Mike Lazaridis say the world won't have to wait long. While RIM's sneak peek of the BlackBerry 6 technology in April didn't spark much enthusiasm, Balsillie says there's much more to come. He's planning a new look for BlackBerry's devices, enhanced software, and a better user experience. "The whole global computing game is very turbulent right now," he says. "There are always things you can do better, but we have a great strategy. Be careful not to look at just a short period of time and draw conclusions."

The bottom line BlackBerry's dominance in the business market may wane unless RIM can come up with sexy devices for consumers, too.

Brady is senior writer at Bloomberg Businessweek in New York. Hesseldahl is a reporter for Bloomberg Businessweek. With Cliff Edwards and Matthew Robinson.