Newsflash: Apple and RIM Are Competitors.

Posted by: Arik Hesseldahl on December 21

Henry Blodget over at the Alley Insider opines today that competitive war has broken out between Apple and Research In Motion, the maker of the Blackberry.

His point is well taken, though I think his observation is a little late to the party. RIM has been hammering at the high end of the wireless consumer spectrum for some time, having cornered the enterprise space pretty handily. I think I once wrote about how I argued a bit with RIM CEO Jim Balsillie some years back about how his devices needed cameras, as the Treo had them, all the Motorola phones had them, and most of the Microsoft phones had them too. Consumers, I argued, would flock. He didn’t agree, or at least didn’t agree then. Consumers weren’t yet on his radar screen.

Fast forward to yesterday’s RIM earnings call, and this money quote from Balsillie yesterday: “BlackBerry’s platforms have crossed over from being viewed as a primarily enterprise product to being marketed as a strong mainstream offering by our partners. At the end of Q3, approximately 34% of our subscriber base was non-enterprise.” That would mean more Blackberries were sold to consumers than iPhones. Great devices like the Curve and the Pearl backed by low-priced data plans from the service providers gave Blackberry sales a healthy boost and RIM’s stock is up 12% today.

The other front will be the enterprise, where Apple’s making advances in fits and starts. Years ago, there were people sneaking a new gadget into the office called a PalmPilot. The same people are sneaking in their iPhones, and eventually Apple’s going to have to figure out a way to make nice with Microsoft Outlook without making the heads spin in the corporate IT department.

Now take a look at the Blackberry 9000, a heavily rumored device that looks an awful lot like an iPhone. Henry’s right: The battle is underway, and actually has been for some time. Apple and RIM are in for a real donnybrook in 2008.

Apple’s advantage is media. It has iTunes and music and video behind it, which RIM doesn’t do all that well, at least not yet. RIM’s advantage is its established relationships with corporate IT departments, and with many many carriers.

I for once can’t wait to see Apple’s iPhone sales numbers for its Q1 2008, because that will set the tone for the rest of the year, and if they’re high enough, could put RIM on the defensive.

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Reader Comments

Saied Mohammed

December 22, 2007 03:48 AM

I am not sure where Apple markets their iphones, but with RIM in the stategic areas of growth, India, Brazil, China, Russia and the 63 other countries where land lines may not exist, plus the mammoth task awaiting them on the airplanes. You must remember that RIM is interested in efficiency and communication. Work while you travel for professionals in all walks of life : from children to managers, doctors, delivery people vacationers througout the globe. I say watch out lap-top producers... the berry is a lot more than its cracked up to be. Not only is RIM a threat to Apple, its as much a threat to to Microsoft ( in that not as many laptops might be needed in the future) and its threat to Nokia is more than real. The “toys on a phone” is not what going to drive the business, it’s the multi functionality of the unit.

For Christmas, I decided to go with the pearl...instead of a laptop because I have a desk top to do all my dirty work.
PLUS … the sure-type means fewer key strokes for my physically disabled to manage short e-mails

Constable Odo

December 22, 2007 02:57 PM

It's going to be a toss-up until Apple announces push e-mail and Exchange Server sync. Then the free ride is over for RIM in the corporate world. The iPhone will accomplish in a year what it took RIM years to do. This is Apple's first handset and they're accomplishing things that most handset companies and WS said couldn't be done. All the rest of the handset companies can do now is play catch-up.

There's no way RIM can compete against Apple in the consumer handset market. RIM just doesn't have the resources to do it alone. They'd have to revamp their whole retail business. They'd have to come up with an OS and UI that could compete against the iPhones elegance. If anybody thinks that RIM can develop an OS better than Leopard for the iPhone when even Microsoft can't do it is crazy.

Apple has a whole line-up of products that can be integrated with the iPhone. Apple can undercut prices for iPhones and still reap large profit margins if necessary. I don't think they'll need to, however. iPhones will be integrated into new vehicles as with iPods. With just three retail stores in Manhattan they can probably sell more iPhones in a day than RIM can sell BlackBerrys in a week.

With $15 billion of cash sitting in the bank Apple can pick and choose whatever weapons they need to cripple RIM.

lrd

December 22, 2007 03:50 PM

I'd put my money on Apple. RIM's phones are so yesterday. Hey DOS 7.0 was outselling Macs back in 1993. RIM's out of their league on this one. And to boot they must side step 200 of Apple and others patents which ain't going to be easy for a bunch of close to amateur GUI programmers!

Richard Dib

December 22, 2007 09:56 PM

The iPhone is a computer in the shape of a Phone. It has an operating system just like a computer. It's software is easily updated via its iTunes interface. That is the most significant difference between the iPhone and the Blackberry.

It will take many years for other competitors to catch up to this. They might come out with devices that "look" similar but internally they will be significantly inferior.

dogmafree

December 23, 2007 05:03 AM

Please check your facts before posting...

Outlook has never been in contention. It's Exchange, two completely different products. In addition, the whole MS issue is a red herring. iPhone has always been able to work with both Outlook and Exchange. However the real issue that's intentionally dismissed is the vast majority of businesses on this planet are small to medium sized, not Fortune 500 sized. Those businesses typically don't run Exchange servers, so the issue is moot.

Secondly. In checking AT&T and Verizon plans for either the Blackberry or Nokia offerings, prior to purchasing an iPhone, all other options were more expensive over the term of the contract.

For an outfit with the moniker "BusinessWeek", it's clear you rarely have a grasp on what actually happens in the business world.

Signed,

Tired of Dogma from Urinalists

Jon Mark Hancock

December 23, 2007 10:33 AM

I had a Blackberry 8700C. Well, since I'd bought it, I actually still have it, but it sits in a drawer, and my current personal phone is an iPhone.

I suspect that's indicative of how successful they're likely to be in the consumer space, unless they really do something radical with their products. I've looked at the newer RIM models out of curiosity, and haven't seen anything that would change my mind. I use a Blackberry still at work, but much of my work mail winds up routed to my iPhone, because the BB's hasn't been very reliable (I'm shortly to get my 4th one in three years- and no, I don't drop them, though I've considered throwing them at times.... ;^)

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A blog on the daily doings of Apple and the many companies in its orbit, with insight and analysis by two longtime Apple-watchers BusinessWeek Senior Writer Peter Burrows and BusinessWeek.com Senior Technology Writer Arik Hesseldahl.

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