Bloomberg News

BlackBerry-Maker RIM Plans IPhone, Android Service Support

November 30, 2011

(Updates with closing share price in 10th paragraph.)

Nov. 29 (Bloomberg) -- Research In Motion Ltd. will offer companies software to manage the iPhones and other handsets that are increasingly displacing its once-dominant BlackBerry, seeking to bolster relationships with corporate customers.

BlackBerry Mobile Fusion, as the device-management software is known, will be available in the first quarter and can run alongside or replace the BlackBerry Enterprise Server networks RIM now operates for companies and government agencies, said Alan Panezic, vice president of platform product management.

“This is a really, really important strategic move,” he said in an interview. RIM is conducting trials with financial- services, manufacturing and pharmaceutical companies, he said.

The flow of devices such as Apple Inc.’s iPhone into the workplace is accelerating as companies seek to save money by letting workers use their own devices and making those more secure, rather than giving workers corporate-issued BlackBerrys. With the new software, RIM is offering a solution that lets corporations manage BlackBerrys as well as rival devices.

“There’s big demand for this area and the big advantage RIM will have is the idea you can not only manage your BlackBerry but manage your other platforms from a single console,” said Phil Redman, an analyst with Gartner Inc. in Stamford, Connecticut. “In the end though, it’s not going to help them sell more BlackBerrys and that’s what they need to do.”

Two Businesses

RIM, based in Waterloo, Ontario, posted its first quarterly revenue decline in nine years in September and its U.S. market share sank to 9.2 percent in the third quarter from 24 percent a year earlier, according to research firm Canalys.

That happened as rivals like Apple and Samsung Electronics Co., which uses Google Inc.’s Android software, offered phones with better Web-browsing and a wider selection of downloadable apps. RIM’s struggles prompted Mike Abramsky, an analyst at RBC Capital Markets, to suggest the company could create more value for shareholders by splitting into a network-management business and a handset business.

Pierre Ferragu, an analyst at Sanford C. Bernstein & Co., raised his rating on RIM today to “market perform” from “underperform,” saying the stock may climb if the company gets bought or shakes up management.

“As the failure of RIM’s current strategy becomes more obvious, we see shareholder activism leading to a change in management and a takeover, or at least the anticipation of it,” Ferragu said in a note.

RIM rose 5.4 percent to $17.37 at the close in New York, the most since Oct. 5. The stock has lost 70 percent this year.

‘Different Space’

Panezic, who has been at RIM for 11 years, said BlackBerry Mobile Fusion isn’t a major strategic shift in the company’s direction. RIM is well-placed to offer such software given its track record of building and operating servers for its clients.

“Everything we do is a combination of hardware and software and the integration of those together with a network experience,” Panezic said. “All we’re doing is stepping into a different space here.”

Currently, a company that allows employees to bring in an iPhone or Samsung Galaxy will pay a software company such as Good Technology Inc. to build a security system for managing corporate e-mail on those devices.

RIM’s new software was driven by customers saying, “‘we really would like one console that shows us everything, be it iOS devices, be it Android devices, be it BlackBerry devices,’” Panezic said.

PlayBook Software

He wouldn’t say how much BlackBerry Mobile Fusion will cost, only describing the price as “competitive.” Each of the servers will be able to support 10,000 devices, or five times as many as RIM’s current corporate servers.

Panezic also said RIM’s BlackBerry Balance software, which allows companies to give employees freer rein to use their company-issued BlackBerrys for personal e-mail, will be available for its PlayBook tablet computer in February.

The PlayBook, which competes with Apple’s iPad, has struggled to gain popularity among business users. RIM shipped 200,000 of the tablets last quarter, fewer than half of what it sold the quarter before. To spur sales, RIM has cut the price by $300 to $199 and offered it free to some businesses.

“Companies are always changing their security priorities, but having BlackBerry Balance is a good step in the right direction,” said Christian Kane, an analyst at Forrester Research in Cambridge, Massachusetts.

--Editors: Ville Heiskanen, James Callan

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net


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