BlackBerry Pearl a real gem or a mere bauble?

Stuart Corner
Monday, 18 September 2006 10:44

Opinion and Analysis

There is no doubt that the latest BlackBerry, the Pearl, is an impressive technical achievement, but all the hard work has gone to packing in consumer features like camera, MP3 player and video support in the belief that consumers will choose it over competing products because they really want the email functionality.

That's a big ask. And by trying to break into the consumer smartphone market Research In Motion is pitting itself against the likes of Nokia and other manufacturers with huge volume, huge R&D budgets and the ability to exploit synergies across enormous ranges of different models.

In a market characterised by lightening fast innovation and short product life cycles it will be for RIM a treadmill. Even if the Pearl is successful, it will have to start running very fast to match the big players' rate of product development. The cellphone industry is littered with the names of global giants who have given up on or outsourced handset manufacturing to specialists.

For Research in Motion this is a whole new ballgame to the one it plays in at the moment: one it invented and continues to dominate. Research firm Strategy Analytics estimates that 59 percent of wireless corporate email ends up on a BlackBerry, and Gartner reckons that BlackBerries account for 22.5 percent of all PDA sales.

But the features that made BlackBerry such a success in the corporate world: security, immediacy (email is pushed to the device) and synchronisation with the corporate email box, are not likely to be highly prized by consumers, even if they can be convinced that they want to get their email on their cellphones (and there are ways they could do that now).

Price is likely to be a major consideration, and that's an issue for Research in Motion because every email that ends up on Blackberry goes through its servers and it 'clips the ticket' - earning between $US7 and $US10 per user per month according to one estimate.  RIM might have a hard time getting that from consumers.

Another hurdle for RIM is that it has to convince all the carriers that currently sell it products to the corporate market that it will be worth their while gearing up to push the Pearl to consumers. Invariably this will add a whole new dimension to product marketing and to customer support requirements: which will mean training and investment and which, done badly, will come back and bite the operators.

That’s the downside of a high volume market. The upside, of course is that it is big: the consumer market dwarves the corporate market so even a modest market share could boost RIM's fortunes considerably.


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