With Designs on Consumers, RIM Faces Tough Fight

For years, Research in Motion has made its reputation and its money with its line of BlackBerry smartphones, which overwhelmingly are used for business messaging, primarily email.

RIM, first to market with elegant “push” email to mobile devices, supported by the enterprise-grade encryption and corporate email integration of its BlackBerry Enterprise Server (BES), quickly established technology and market leadership over Microsoft and others in mobile business messaging.

Now, though, to drive further market growth and support the upward trajectory of its stock price, RIM has been determinedly seeking to expand beyond mobile business messaging. It has designs on the consumer space, where email is a secondary concern (if a concern at all), and where sleek product design, seamless support for video and audio, and — above all else — consumer-oriented applications and content drive adoption.

While RIM leads technologically and in the marketplace in the realm of mobile email for business users, it is not a dominant consumer brand. Apple — and even Nokia and Samsung, among others — have more strength as consumer brands.

There’s no question that the iPhone is coming on strong in the smartphone space, with the market surge predicated on the strength of Apple’s consumer-friendly AppStore — packed with more than 50,000 third-party applications, the vast majority of which are consumer-oriented, and its more than one billion downloads. RIM remains ahead of Apple in smartphone market share, but one could easily contend that RIM has less growth ahead of it than does Apple.

So, RIM is making its consumer push with the BlackBerry, introducing new BlackBerries, designed with consumers rather than business users in mind. The key to RIM’s consumer success, however, will be whether it can win the hearts and minds of developers and creators, which provide applications and content to consumers, respectively.

That’s why RIM’s BlackBerry App World is so crucial to its consumer success. RIM has approximately 2,000 applications on App World, a far cry from the comparatively astronomical number accrued on the App Store for the iPhone. What’s more, while RIM has attracted some consumer applications to the BlackBerry App World, the site still has more of a business skew, in tone and substance, than does Apple’s App Store.

RIM has considerable work to do if it is to match Apple and others in considerable appeal. It’s early for the BlackBerry App World, of course, but Apple isn’t standing still, and the iPhone and other devices likely will have more cache in developing markets.

Applications and content will drive consumer adoption of next-generation smart phones. RIM has a tough fight ahead.


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