A recent Nielsen report paints a bleak picture for the future of Research In Motion’s BlackBerry. The report states that over 50% of BlackBerry users will abandon the device on upgrade. BlackBerry has not taken the news to heart and are fighting to remain a major contender in the mobile market. BlackBerry is the dominant leader in North America but has been losing ground to Apple’s iPhone and Android based devices. Since the threat from apple first emerged BlackBerry has taken efforts to improve in areas previously neglected such as poor developer support (which leads to fewer apps developed), a poor app store (which leads to fewer apps purchased), a non-standards compliant browser (something that has become expected on high-end smartphones),  widget support, an advertising platform, and touch screen devices. Below is an overview of RIM’s steps (and missteps) to fight off Apple and Android.

October 2008

RIM hold’s its first BlackBerry Developers Conference.

November 2008

After 8 weeks of delays due to ‘bugs’, RIM released the BlackBerry Storm exclusively to Verizon. The BlackBerry Storm was RIM’s first touch screen device and was aimed at taking users away from Apple.

April 2009

RIM launches the BlackBerry App World.

October 2009

RIM released the BlackBerry Storm II exclusively to Verizon. The Storm II’s largest improvements over the Storm I were an improved touch screen and the addition of WiFi capabilities. Two features that received a lot of criticism in the Storm I.

RIM purchased Torch Mobile a provider of a widget platform and the standards compliant mobile browser IRIS.

August 2010

In early August, RIM announced that the upgraded BlackBerry App World is now available to all BlackBerry smartphone users.

• The store now supports credit card payments on top of PayPal–a handful of carrier partners support operator billing options as well.
• BlackBerry App World also boasts new tabbed sections for various application lists;  Users can horizontally swipe or scroll to view the Top 25 Free Apps, Top 25 Paid Apps and Top 25 Themes, along with checklists spotlighting the Newest Apps and Recently Updated Apps.
• BlackBerry App World 2.0 additionally introduces BlackBerry ID, giving users a device-independent user ID tag to enable new payment options as well as seamlessly transfer their personal library of free and premium apps when they upgrade to a new BlackBerry device.
• Also new: Support for QR barcode scanning.
• RIM will no longer mandate that all of the store’s premium apps carry a minimum price tag of $2.99–BlackBerry App World will now offer $0.99 and $1.99 price points as well. However, moving forward RIM will now retain 30 percent of app revenues, up from the 20 percent it claimed when BlackBerry App World first launched–it’s worth noting that all other major app stores offer developers the same 70/30 revenue split.

RIM released their newest BlackBerry device, the Torch,  exclusively to AT&T. [Note to RIM: Playing Keep Up with Apple didn't mean you had to sign an exclusivity deal with AT&T.]

RIM released BlackBerry Podcasts, a free application enabling smartphone users to more efficiently discover and download podcasts from content providers.

In late August, RIM purchased Cellmania, a mobile software platform provider. A move designed to bolster the device maker’s BlackBerry App World storefront.

Reports have also surfaced that RIM is reportedly in the market to acquire a mobile advertising network. As Apple and Google have already purchased Quattro Wireless and AdMob respectively, RIM realized that they need one as well.  In November 2009, RIM announced that they will offer developers the capability to to integrate mobile advertising into their BlackBerry applications.  In August 2010 it was revealed that RIM was looking to acquire Millennial Media but balked at the asking price. Rumors are now circling that Microsoft is now in talks to acquire Millennial Media themselves. It now is unknown whether RIM has chosen to acquire a mobile ad solution or develop services in-house. A recent patent filing has indicated the latter.

Facebook has finally made good on their long awaited promise to add location-based check-ins to their list of services. Facebook unveiled the service Wednesday evening, enabling users to share their current whereabouts in real time via mobile device. The service has already received some negative feedback of users concerned that friends can check them in without their permission. The big question is how this will affect other geosocial apps such as Gowaller, MyTown, PlacePop, Whrrl, and foursquare. Facebook is the most popular application across all major platforms, BlackBerry, iPhone, and Android.

Although eager to try the service, I received the message below.

With Palm acquired by HP, the mobile marketplace needed a new clown jester. It appears that Research In Motion (RIM) (NASDAQ:RIMM) was eager to fill the role. Today, RIM unveiled the Torch, perhaps named in a nod to Torch Mobile whom RIM acquired last year. A new smartphone aimed to stop the flow of users from BlackBerry to Android and iPhone. This is crucial to the future of BlackBerry, the current market leader. According to new Nielsen Company data, BlackBerry remains the U.S. market leader, representing 35 percent of smartphone subscribers nationwide, followed by Apple’s iPhone (28 percent), Microsoft’s Windows Mobile (15 percent, down from 27 percent a year ago) and Google’s Android (13 percent). However, more than half of BB user’s will select another manufacturer when upgrading. Most of these users will choose an Android or an iPhone.

The Torch devices features the long awaited BB OS 6.0. The new OS promises a redesigned user interface that was optimized for both touchscreens and trackpads, a new WebKit-based browser [discussed here last year], expanded messaging features to simplify social media and RSS management, an upgraded multimedia experience and a new Universal Search tool. Other enhancements include the multiple view interface seen on most touch screen devices and a new contextual Action menu.

The new BlackBerry mobile browser is a standards compliant, Webkit based solution. The browser also boasts support for full Flash (not Flash-lite), something missing from RIM’s major competitor, Apple’s iPhone. Although the new OS GUI and mobile browser are impressive, the mobile ecosystem is much bigger than an Operating System upgrade or a new device. RIM has failed to develop an efficient app store or strong developer relations. At a recent speaking engagement, one audience member was surprised to learn that his BlackBerry was capable of running apps at all. RIM has to develop both of these areas and increase public awareness that their devices can be used for more than voice, BBMS,  and email communications.

The device will first be available to the public with the launch of RIM’s new BB device, the BB Torch. RIM is so confident in the Torch’s ability to stand up to both Android and the iPhone that they signed an exclusivity deal with AT&T.  Exclusivity worked for Apple, but hasn’t helped anyone else. This is not a time for RIM to limit the reach of their new device.

Thankfully, the new OS will roll out across existing BlackBerry smartphones including the BlackBerry Bold 9700, BlackBerry Bold 9650 and BlackBerry Pearl 3G in the months ahead. Hopefully for RIM, most BB users will still be using BB devices at that time.

Since I wrote yesterdays blog post “The 9 Lives of Palm“, a number of people have expressed their beliefs that this acquisition will give Palm and WebOS the push it needs to stand against both Apple’s iPhone and Google’s Android. Palm itself optimistically announced that the deal would mean WebOS acceleration. I have nothing against Palm or HP, but I find this to be unlikely. Those who believe that the HP acquisition will result in WebOS acceleration or huge gains in market share for the Palm line (if you can call two devices a line), are deluding themselves by focusing only on the OS or the hardware. For any player in the mobile industry to succeed they must understand the mobile ecosystem and their place in it. Failure to do this means certain death.

The mobile ecosystem consists of operators/carriers, networks, devices, platforms, operating systems, application frameworks, applications, and services.  Let’s see where Palm  stands in regard to each ecosystem component.

Operators/Carriers:  Operators or carriers control networks and also provide a distribution channel for devices and increasingly applications. It is important to have good relationships with carriers. However, since carriers have different types of networks (See networks next) it is common for device makers to provide different devices for different carriers. The release of the iPhone and its associated exclusivity deal created what became in my opinion the start of a ridiculous practice. Other carriers began to look for their own exclusive devices to use as leverage to attract customers. Carriers would often subsidize the cost of the devices which made device makers happy as this could mean moving higher volumes. However, there was only one holy grail, and Apple already gave it to AT&T. Other devices should have seen this as an opportunity to gather more market share by avoiding exclusivity deals. Instead they signed exclusivity deals of their own. Palm originally (2009) sold their Pre and later Pixi devices exclusively through Sprint, the number 4 carrier in the U.S. Palm should have released on every U.S. and foreign carrier possible. Verizon just got the Palm Pre plus and Pixi plus in 2010. Both devices will be coming to AT&T later this year. This is another sign that the practice of exclusivity is coming to an end and not a insightful realization by Palm.

Networks: Networks are operated by carriers. Two standards are used by the majority of U.S. carriers, GSM and CDMA. Devices have to be built for a particular network. This sometimes limits the availability of devices across all carriers. Sprint and Verizon are CDMA operators which could explain why Verizon got Palm’s devices prior to AT&T which is a GSM operator. Taking a year to offer a GSM version of a CDMA device is not a big problem in my opinion.

Devices:  Companies such as BlackBerry, Nokia, and Apple have been successful at manufacturing both mobile handsets and producing the OS Software. Others such as Microsoft and the Open Handset Alliance (Google’s Android) have mostly licensed their software to manufacturers such as Motorola and Kyocera. Palm has had a long history of struggling with doing one, the other, or both. For more information see my post “The 9 Lives of Palm.”

Platforms: Platforms provide a core programming language that give programmers a means to create applications. Palm uses three different proprietary platforms, the Palm OS Platform based on C/C++ used on low-end smartphones such as the Centro, Windows Mobile based on C++ or .NET CF, and webOS which is based on the WebKit browser framework. webOS allows developers to create applications using HTML5, CSS, and JavaScript.

Operating Systems: Operating Systems tend to be exclusive to smartphones and provide a set of core services that allow applications to connect with each other and the underlying devices. Palm operating systems are Palm OS, Windows Mobile, and webOS. However, only WebOS is of importance here. Palm OS is a legacy operating system and Windows Mobile is a licensed operating system from Microsoft. WebOS is based on the WebKit platform.

Application frameworks: Application frameworks or API’s run on top of Operating Systems and are used to create applications. WebOS is based on WebKit and has a built-in application catalog and APIs for extending JavaScript in order to access hardware features of the devices.

Applications: Applications are of course software you run on your mobile device. Just like in the PC battles (PC Vs. Mac), software is the name of the game. Whomever has the most apps has a distinct avantage.

Services: Services are tasks such as using the Internet, sending text messages, or basically anything the user wants to do.

The 9 Lives of Palm

The first company I founded was called PalmCenter. PalmCenter was an online distributor of applications written for the PalmOS. The demand for these applications never materialized on a level to support the business. As we closed the doors, I sat back and began to watch Palm struggle with its own identity.

The recent purchase of Palm by HP led me to contemplate how many chances Palm has been given. It seems as if Palm has had the proverbial nine lives, in which case they better get it right this time.

Life number one: Palm Computing, Inc. was founded in 1992 by Jeff Hawkins, Donna Dubinsky, and Ed Colligan. The company was started to create a PDA for consumers, called the Zoomer. The devices were manufactured by Tandy and distributed by Casio, while Palm provided the PIM software. The operating system was provided by Geoworks. The Zoomer failed commercially, but Palm managed to survive through selling synchronization software for HP devices, and the Graffiti handwriting recognition software for the Apple Newton MessagePad.

Life number two: In 1995, the company was acquired by U.S. Robotics Corp who was in turn acquired by 3Com (Ah those crazy 90’s). In June 1998, the founders became unhappy at the direction in which 3Com was taking the company, and they left and founded Handspring, a maker of Palm OS-based Visor branded personal digital assistants and Treo branded smartphones.

Meanwhile back at Palm, 3Com made the Palm subsidiary an independent, publicly traded company traded on the NASDAQ under the ticker symbol PALM. By June 2001 the company’s shares were trading at US$6.50, making it the worst performing PDA manufacturer on the NASDAQ index at the time.

Life number three: In January 2002, Palm set up a wholly owned subsidiary to develop and license Palm OS, which was named PalmSource.

Life number four: PalmSource was then spun off from Palm as an independent company. 

Life number five: In 2003, the hardware division of the company merged with Handspring, and was renamed to palmOne, Inc. 

Life number six: In 2005, palmOne purchased PalmSource’s share in the ‘Palm’ trademark. In July 2005, palmOne launched its new name and brand reverting back to Palm, Inc. and trading under the ticker symbol PALM once again. In late 2005 ACCESS, which specializes in mobile and embedded web browser technologies, acquired PalmSource, who’s PalmOS and BeOS assets were used to create the open source smartphone ACCESS Linux Platform. On January 4, 2006, Palm released the Palm Treo 700w, the first Windows Mobile-powered Treo in a partnership with Verizon Wireless and Microsoft. 

Life number seven:  In December 2006, Palm, Inc. paid US$44 million to ACCESS for the rights to the source code for Palm OS Garnet. With this arrangement, a single company is again developing Palm hardware and software. Palm can modify the licensed software as needed and it need not pay royalties to ACCESS over future years.

Life number eight: In June 2007 Palm formed a strategic relationship with the private-equity firm Elevation Partners who has purchased a 25% equity stake of the company for US$325 million. On December 18, 2008, Palm announced that the company will no longer develop any new handheld PDAs. Palm announced a new operating system, webOS, and a smartphone, the Palm Pre at CES January 8, 2009 in Las Vegas. The device was originally released exclusively with Sprint but is now sold through Verizon Wireless as well.

Life number nine: On April 28, 2010 Hewlett-Packard announced it would purchase Palm at $5.70 a share for $1.2 billion in an all-cash deal.

I have recently returned from CTIA 2010 in Las Vegas and was surprised to see Android everywhere. I wasn’t sure if I had stumbled into a SciFi conference instead. Android’s importance as a mobile platform seems assured by the number of carriers and handset manufacturers eager to showcase their Droid phones. I even got a nice picture with a Kyocera Droid who borrowed my hat.

Much of the media attention in the mobile industry is on consumers and not enterprise. This does not mean that there hasn’t been a lot of enterprise level activity. All major enterprise software vendors have incorporated mobile strategy into their portfolios.  Last year, SAP announced an agreement to build all of their mobile applications on the Sybase Unwired Platform (SUP). Now the company has announced their first offerings. Sybase Mobile Sales for SAP CRM and Sybase Mobile Workflow for SAP Business Suite.

Sybase Mobile Sales works on iPhone and Windows Mobile devices while the Sybase Mobile Workflow application works on iPhone, Windows Mobile, and Symbian. BlackBerry support will be offered shortly. Previously, SAP offered a BlackBerry Sales Client for their CRM system. Discussing the change to SUP, Vinay Iyer, head of CRM Marketing at SAP, states that delivering a native client app for each platform ‘is complex and not scalable.’

Mr. Iyer is correct on that point. Delivering native apps for every platform is complicated and not scalable. Fragmentation has long been the 200 pound gorilla in the room during mobile strategy discussions. I have seen many firms select a wide variety of strategies, often misguided, in their attempts to overcome this challenge. Solutions [and resolutions] have ranged from attempting to support “the big three” to shelving mobile initiatives until “the problem works itself out.” It is true that fragmentation is a challenge in the mobile industry. One popular comparison is to the browser wars in the 1990′s. Companies like Sybase have recognized that this is a challenge and like many great companies, have turned it into an opportunity. By offering a platform that allows multi-device application support, they are offering one solution to a growing problem.  While all mobile strategies must overcome fragmentation, enterprise applications bring additional challenges for mobile designers and developers. In turn, multi-device support is only one of the mobile challenges that SUP attempts to answer. Others include enterprise management challenges such as, centralized device administration, security controls, and enterprise control over a portion of the device.

Last month, I announced that AT&T will receive their first Android phone, the Motorola Backflip. Last week I announced that the Motorola Backflip would use Yahoo search instead of Google search. But the latest news is the most shocking. AT&T has locked the phone down. Users will not be able to install non-market apps. Previous Android devices from rival U.S. operators have included support for non-market apps as a default option. In fact, this is one thing that Android proponents have constantly referred to as one of the open-source platform’s biggest advantages over Apple’s rival iPhone.

If you are expecting me to provide an answer to why AT&T has done this you will be disappointed. My guess is they want Apple style control over the app store and the apps sold through it as well as preventing AT&T’s perennial fear – tethering.

Apple has filed a lawsuit against device maker HTC for allegedly infringing on 20 Apple patents related to the touch screen and gesture recognition. In addition, Apple has asked U.S. officials to block imports of HTC’s Android based phones.

At T-Mobile, Yahoo is out and Google is in, at least in search. However, Yahoo stressed that the two firms will continue to partner on services including Yahoo Mail and Yahoo Messenger–in addition, Yahoo news, sports, finance and weather information will remain prominent on t-Mobile’s Web2go portal. Yahoo, responded to the news by retorting that they were despite the T-Mobile decision, the company was displacing Google as the trusted partner of choice and currently has over 80 carrier partnerships. Carrier partnerships aside, I’d like to know which seach engine is most utilized by mobile users. And the answer is….Google. The Nielson company stated that mobile phones in the U.S. accessed Google Search more than any other website between January and September 2009. Google now accounts for more than nine percent of all mobile web page views in the U.S.

Of additional interest is recent news that the Motorola Backflip, the first AT&T smartphone based on Google’s Android mobile operating system, will provide Yahoo as its default mobile search engine. Most if not all previous Android devices launched in the U.S. have used Google as the default search option. Google pointed out that  the Motorola Backflip is not a Google-branded product and, therefore, they had no comment. In my opinion, this shows how open and free the Android Operating System is as a product of the Open Handset Alliance of whcih both Motorola and Google are a part.