Bad Week for RIM – BlackPad Next

RIM the maker of the BlackBerry products has not had a very good week at all.

1. UAE has indicated that they are going to ban all BlackBerry products due to their inability to monitor BlackBerry email. Saudi Arabia is indicating a similar move, and India is making noise too. Not sure that RIM isn’t in the right here, but intelligence agencies are clearly monitoring electronic communication to track criminals (terrorists or political dissidents depending upon the country). And you can bet the NSA has already cracked BlackBerry’s encryption scheme.

2. Their flagship new device the BlackBerry Torch with their new OS 6 version has landed to a lukewarm thud. The early reviews are indicating that it’s a nice phone maybe even a great RIM phone, but for 2010 it’s barely reaching the bar set by Android phones and the iPhone 4. It’s a big step up for RIM, but in the smartphone space the new phones won’t stop the flight to Android and iPhone. In fact, there are already techblogs sounding the death bell for RIM.

3. In Q2 2010, Android is surpassing RIM and taking the 1st place position away from RIM in US smartphone sales. According to NPD, RIM has lost nearly 8% percentage points in market share over the first 2 quarters of 2010. Apple has held steady at around 22%, and Apple’s iPhone 4 was only on sale for 6 days in Q2. This is potentially leading to the Q3 news for RIM being even worse due to very high iPhone 4 sales, and the wave of Android phones is not slowing either. One huge caveat, NPD data is very skewed to consumer sales, and the enterprise is really RIM’s home. Still NPD previously had been reporting RIM in the lead with a bigger marketshare, so presuming no change in methodology it’s still bad news.

The other piece of news in the background for RIM is that they are releasing an iPad competitor this fall to be called the BlackPad.

Now this device is going to have a similar screen to the iPad, be priced in a similar range, and probably will feature an inward camera for video conferencing. RIM will apparently market this device to businesses.

MoD may be wrong, but this device sounds like a total train wreck. The kind of public failure that a company which is being second guessed does not need. It could be worse than Microsoft’s Kin debacle. And could cost RIM a lot of cash.

RIM’s entire main appeal is based off hardware keyboards. There’s no indication that the device will even have a keyboard. RIM’s touchscreen only phones have been wholesale failures.

RIM’s touchscreen OS is just now getting to the level of Android and the iOS of several years ago. RIM’s portfolio is not stacked with advanced OS GUI knowledge. One of the main complaints about the new RIM OS 6 is the lack of polish of the GUI. Exactly how is the RIM OS going to scale to a bigger screen? Apple has had years of experience in power management for devices with larger screens, does RIM have the expertise to move their OS to a bigger screen while maintaining the good battery life?

RIM’s developer community is in shambles. Who is going to develop for this new tablet? Who is going to develop the remote login/remote desktop management software for this device? Those are exactly the kind of applications that enterprise customers will want.

RIM’s OS does not support a full version of Flash, so RIM cannot even use this alleged weakness of the iPad in their marketing strategy.

By the time RIM launches this device, Apple will have already released the new iOS 4 for iPad, which will only enhance and improve the device bringing the much needed multi-tasking support for applications in particular.

So who exactly is going to buy these devices? And unless RIM can get the price sub $350, it’s hard to see how corporations will be interested.

The launch of this device this fall and the Torch’s averageness highlight the huge mistake made by RIM this spring, not buying Palm. With the WebOS in their portfolio, RIM would have a chance to reinvent the OS for their phones with an eye to consumers while keeping their strong Enterprise server roots/connections. A combination of WebOS with RIM’s solid hardware could be a real challenger to Android and Apple.

Right now, it appears that it is a matter of time (two years?) before a desperate RIM to try and stop a market share decline switches to another OS (Windows Phone 7 or Android being the likely choices). This “bet the company” move will be a massive gamble, but unless the pundits are wrong RIM’s declining market share is going to force something more than just the incremental upgrades found in the BlackBerry Torch.

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