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Commentary: RIM on the brink

As the long-running patent battle enters its last days, don't look for the BlackBerry maker to shut down--but it will start hobbling.

by Ellen Daley, with Brownlee Thomas and Benjamin Gray, analysts

The tedious battle between Research In Motion and NTP over the patent rights to the BlackBerry wireless e-mail technology drags on, with each camp losing and winning.

Stoppage of BlackBerry services in the U.S. won't happen because it wouldn't benefit either NTP or RIM. However, as the case progresses, expect more headlines and more concern to build from companies using RIM. What should companies do? Put limited effort in a plan that identifies alternative technologies, a migration timeline and future application requirements. RIM should settle: It has more pressing strategic issues to address, with competition heating up from Microsoft and Nokia.

In November, two rulings wrote two more chapters in the exhausting RIM-NTP legal battles over patent rights to the technology underlying current-generation BlackBerry mobile wireless services. One, an appellate court ruled that a tentative $450 million settlement would not be upheld--to RIM's chagrin. Two, the U.S. Patent and Trademark Office provided a nonfinal rejection of a key patent claim--crippling NTP's original case. What to expect now?

• BlackBerry service won't be stopped. Nobody wins if service is shut down. If the judge does rule to enforce the injunction, there would likely be a 30- to 60-day grace period before service were shut off--although the federal government has weighed in, arguing that BlackBerry is considered an essential service, so that group of users would be spared. This would give RIM time to push forward a more generous settlement with NTP, or, alternatively, try to leverage the USPTO's rejection of the patents to extend litigation. Of course, it would be corporate suicide for RIM to let the service stop--even if it means paying NTP considerably more than the original $450 million

• The "workaround" will never be proven. Let's face it: If there were a viable workaround technology that could be quickly put in place, RIM could save a lot of time and money, and the worry of its customers, and use it. For more than a year, the company has suggested that it has been testing--successfully--some workaround solutions that don't touch any of the disputed technologies. Putting a media whiff of an imminent alternative technology better positions RIM to negotiate a smaller settlement with NTP, but it's not what enterprises need. They need physical proof of a viable and scalable permanent solution, something on which RIM has not been forthcoming

• Companies will look elsewhere. Increasingly concerned enterprise clients have flooded Forrester with inquiries regarding a possible shutdown of service--all the executives with whom we spoke this year want firm contingency plans. Their IT departments are all talking with their carriers and investigating alternative technologies. One that's receiving a lot of attention is native Microsoft push e-mail

• RIM will become a niche provider. This case extends into a time when many companies are simultaneously expanding their adoption of mobile applications beyond wireless e-mail. RIM recently lowered fourth-quarter new subscriber expectations by 3 percent. The company will now have to engage a battle on three fronts: fending off heavy-hitting competitors that have a well-established presence in carriers and enterprise IT; proving its mobile application capabilities beyond wireless e-mail, which it is on shaky ground with; and dispelling shutdown rumors. As a result, RIM will be the niche product that has the best solution for wireless e-mail--and not much else.

Options for wireless e-mail and beyond
While there is little chance of a true stoppage in the U.S. (which is the jurisdiction of the legal case), Forrester recommends that enterprises review other technologies. Why? It's important to have a ready answer for corporate executives about such a visible court case that directly impacts the day-to-day working practices of executives and their staff. But limit the effort expended--a shutdown is extremely unlikely. Forrester recommends putting a plan in place that wouldn't take longer than one week for one person to prepare. What to include in this plan?

• Identify alternative technologies. Your options: One, Windows 5.0 mobile devices with Microsoft Exchange 2003 back-end pushing e-mail out--but keeping in mind that the devices won't be available from mobile carriers until the first quarter of 2006. Two, Windows Mobile or Symbian devices with a Nokia/Intellisync, Smartner or Visto back end to push wireless e-mail out. These can be carrier-hosted or behind your firewall. Forrester doesn't recommend considering Palm OS devices because Palm OS was recently sold and its longevity in the enterprise is limited. You don't need to go so far as to test these alternative technologies yet, but do contact the hardware vendors and get introductions so you could make a quick decision if necessary during the 30- to 60-day grace period if shutdown does happen. Remember this is only for the U.S., so focus efforts there.

• Draft a migration plan with timeline. Write up a short plan outlining how employees would migrate to new devices. Identify priority employees--the heaviest users of BlackBerry are usually senior executives--and make a reference list of who would get the new devices first. Identify where you would purchase the devices, including checking with your existing carrier(s).

• Think beyond wireless e-mail. Find out what other types of applications users want to access using their company mobile devices and use that information to drive your contingency device decisions. Typically, applications that are used within lines of business, such as a sales force application, are preferred to run on Windows Mobile devices because of user familiarity--and they now can also get push e-mail.