RIM arming itself for smartphone battle

A spate of recent acquisitions show that the BlackBerry maker isn't ceding its position as smartphone king easily. But is it too late to stave off the iPhone's coup in corporate IT departments?

Erica Ogg Former Staff writer, CNET News
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.
Erica Ogg
4 min read
The tried and true Blackberry has some intense competition in the corporate world these days.
The tried and true Blackberry has some intense competition in the corporate world these days. CNET

Bringing in Swedes as mercenaries to reverse a coup in the smartphone world isn't such a bad idea.

Today Research In Motion announced it is buying The Astonishing Tribe (TAT), a Swedish mobile software design house. It's known for making shiny, slick interfaces for a variety of phone makers, especially for Android-phones. But RIM is smartly conscripting the company into focusing on the BlackBerry's tried and true but, frankly, boring interface, as well as the yet to be fully revealed tablet, called the Playbook. Full details of what RIM has in mind were not disclosed.

This is a good move for RIM: bring in some young, hip people to loosen up the very business-like approach it's taken for years. And it's actually just the latest in a series of interesting acquisitions: RIM picked up app maker Data Viz and app store software maker Cellmania in August, and QNX, on which RIM is building the software for its tablet.

These acquisitions are clearly in response to the iPhone, iPad, and the recent rise of Android phones. Still, it's hard not to wonder, why has it taken RIM this long to respond? Apple has been advancing on RIM's position as smartphone leader for years, yet the company has been doing basically the same old thing: turning out reliable smartphones for business people. So why wasn't it taking steps to prevent this attack two years ago?

A new graphic that appeared on TAT's Web site today.
A new graphic that appeared on TAT's Web site today Screenshot by Erica Ogg/CNET

Though it should get credit for trying to up its game this year in software through acquisitions, it's been clear that RIM, once the king of smartphones, was in trouble for a while. The signs have been there: Apple's initial iPhone in 2007 and its iOS software took the mobile world by storm. Then in 2008 it kicked off the app store craze, which spawned lots of copycats, including RIM's Blackberry App World, and cemented Apple's leadership in the mobile world. Still, RIM seemed to take comfort that Apple's target was the consumer, and RIM's was the busy worker bee.

But all the while the number of iPhones sold versus BlackBerrys sold in the U.S., where RIM was long dominant, kept getting ominously closer. Finally, it happened: in October analyst firm IDC released its quarterly count of smartphone sales and for the first time Apple outsold RIM, 14.1 million iPhones to 12.4 million BlackBerrys.

But RIM actually has more to worry about. Android phones came along in 2008, and then really took off in 2009. And while the BlackBerry still has a larger share of smartphones than Android does (27.4 percent to 22.7 percent, according to Nielsen), that's poised to change. A recent survey by Nielsen found that the BlackBerry was in third place behind the iPhone and Android phones when consumers were asked to name their "most desired" smartphones. That's got to sting.

iPhone goes corporate
Apple clearly enjoys broad popularity among consumers, but those same people are taking their phones to work now too. Though the iPhone did not ingratiate itself to corporate customers at first--no native Exchange support, for one--Apple fixed that. And now Apple likes to talk about how 80 percent of all Fortune 500 companies are using or piloting the iPhone. The company is even actively pursuing contractswith large businesses and government agencies now. In other words: ransacking RIM's stronghold.

RIM isn't the first or only former mobile leader to get displaced by the rise of iOS and Android. Apple and Android phone makers have already steamrolled over Palm, the inventor of the Treo, though that company's development process went astray awhile before either came along. Despite a shiny new phone with arguably awesome software, the company just couldn't compete with the onslaught from Apple and Android. The success of two competing platforms were just the final nudge that sent the company into the arms of a suitor with more money and stability, HP. What exactly HP does with it is still TBD, but there are new smartphones and tablets with WebOS installed coming next year.

RIM is finally signaling that it isn't waiting for that to happen. It bought QNX for its software, Cellmania for its app distribution prowess, and TAT for its interface design chops. If the Blackberry maker is going to compete in the tablet world, with its App World marketplace, and with its software for smartphones, these are good steps.

The Blackberry needs some panache for sure. Bringing in a group of designers with a proven eye for what's cool is a great start. But RIM doesn't need a full-on makeover and it shouldn't abandon what got it here: its loyal core audience has always been the corporate world. It needs to add some excitement and make it look good next to an iPhone or an HTC or Samsung phone, but probably doesn't need to do what Microsoft did with Windows Phone 7--go back to the drawing board completely.

But still, despite all these latest efforts, it's hard not to wonder whether this is all too little, too late for RIM to retake its crown as the go-to mobile device for business types.