RIM and Its Troubles (1)

8
SM0374 Articles for Seminar 1: RIM/Blackberry 1 Economist Magazine, October 13 th 2011 You can¶t live with t hem, but you can¶t live without them. Users of BlackBerry smartphones often curse the flashing red light that tells them, wherever they are, that yet another e-mail demands their attention. But they curse its absence ev en more. This week mill ions of them, first in Europe, the Middle East, Africa and India, then in the Americas, found themselves without e-mail, messaging and internet services, sometimes for long periods. On October 13 th , three days after the tr ouble had started, Research In Motion (RIM), the Canadian maker of the smartphones , said services had been fully restored. Mike Lazaridis, one of RIM¶s tw o co-chief executives, apologise d to his customers. ³You expect better from us,´ he said. ³I expect better from us.´ By then, many customers had vented their spleen at RIM on Twitter and F acebook (no t, presumably, from their BlackBerrys). The cause of the problem, RIM executives explained, lay in the f ailure of a switch in its European infrastructure (in Slough, west of London). A redundant switch that should have taken over did not. That caused a backlog of messages in Europe and hence the initi al regional delays. The spread of the problem to the Americas by October 12th seems to have been a consequence of the global nature of BlackBerry traffic, as messages to and from Europe built up and caused delays on the other side of the Atlantic. For RIM, the int erruptions could scarcely hav e come at a w orse time. The company has had a bad year. In its most recent quarter (ending in August) its r evenues were 10% lower than a year before, at $4.2 billion. Its profit, at $329m, was down by more than half. According to Gartner, a research and consulting firm, in the second (calendar) quarter RIM¶s share of the smartphone marke t declined to 12%, from 19% a year earlier. BlackBerrys, it is true, still have lots of enthusiastic followers. Commuters and corporate road warriors needing to keep in touch with colleagues and clients swear by them, as well as into them and at them.  A QWERTY keyboard of buttons is kind t o clumsy middle-aged thumbs (though touch screens are also on offer). Information-technology departmen ts, partic ularly in companies that put a special premium on security, love them too: life is fairly simple with a PC on every desk and a BlackBerry, connected to the corporate e-mail system, in every hand. And many youngsters, especially in Britain, have taken eagerly to Bl ackBerry Messenge r (BBM), a free instant-messaging service. Less happily, politicians called for BBM to be shut temporarily during this summer¶s English riots, because some were using it to organise disturbances. But the smartphone business is changing²away from RIM. Not only a growing number of road warriors, but al so their bosses, want to use their own smartphones rather than company-issue d BlackBerrys, and are increasingly allowed to do so. Apple¶s iPhone and the many Android-based competitors boast many more apps, and are simply trendier. After this week¶s palaver, some BlackBerry owners may be tempted to treat themselves to the latest version of the iP hone, which goes on sale from October 14th. [See Appendix 1 for a comparison of smartphones]  It has not helped that RIM w as slow to get new products to market, although phones with a new operating system are now appearing. The compan y is not only smarting, so to speak, in its core business. It has also made a lacklustre entry into t he tablet market, shipping 500,000 o f its PlayBooks in its first quarter but only 200,000 in its second. Gartner describes its tablet operating system, QNX, as ³a promising platform´, and thinks RIM may sell 3m PlayBooks this year. But even if it manages that, that figure looks puny next to forecast sales of more t han 46m iPads and 11m Android-based tablets. Some BlackBerry customers sound remarkably forgiving. A ³small-business owner´ who took part in RIM¶s press conference on October 13 th said that he had intended to challenge Mr Lazaridis¶s contention that services had been resto red. Yet by the time he spoke his e-mails were flowing again. ³Thank you for all you¶ve been doing,´ he said. Others may be less patient. Investors certainly are. RIM¶s share price has fallen by more than 60% since February. Whatever wonders its co-bosses , Mr Lazaridis and Jim Balsillie, have worked in the past, two leaders now look as bad as none. Jaguar Financial, a Canadian investment bank, smells complacency. It wants a change at the top and in direction, perhaps even to break RIM into three: a network company, a device-maker and a holder of patents. It claims the suppo rt of the owners of 8% of RIM¶s shares.

Transcript of RIM and Its Troubles (1)

Page 1: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 1/8

SM0374 Articles for Seminar 1: RIM/Blackberry 1 

Economist Magazine, October 13th

2011

You can¶t live with them, but you can¶t live without them. Users of BlackBerry smartphones oftencurse the flashing red light that tells them, wherever they are, that yet another e-mail demands their attention. But they curse its absence even more. This week mill ions of them, first in Europe, theMiddle East, Africa and India, then in the Americas, found themselves without e-mail, messaging andinternet services, sometimes for long periods. On October 13th, three days after the trouble hadstarted, Research In Motion (RIM), the Canadian maker of the smartphones, said services had been

fully restored. Mike Lazaridis, one of RIM¶s two co-chief executives, apologised to his customers. ³Youexpect better from us,´ he said. ³I expect better from us.´ By then, many customers had vented their spleen at RIM on Twitter and Facebook (not, presumably, from their BlackBerrys).

The cause of the problem, RIM executives explained, lay in the failure of a switch in its Europeaninfrastructure (in Slough, west of London). A redundant switch that should have taken over did not.That caused a backlog of messages in Europe and hence the initial regional delays. The spread of the problem to the Americas by October 12th seems to have been a consequence of the global natureof BlackBerry traffic, as messages to and from Europe built up and caused delays on the other side of the Atlantic.

For RIM, the interruptions could scarcely have come at a worse time. The company has had a badyear. In its most recent quarter (ending in August) its revenues were 10% lower than a year before, at$4.2 billion. Its profit, at $329m, was down by more than half. According to Gartner, a research andconsulting firm, in the second (calendar) quarter RIM¶s share of the smartphone market declined to

12%, from 19% a year earlier.

BlackBerrys, it is true, stil l have lots of enthusiastic followers. Commuters and corporate road warriorsneeding to keep in touch with colleagues and clients swear by them, as well as into them and at them. A QWERTY keyboard of buttons is kind to clumsy middle-aged thumbs (though touch screens arealso on offer). Information-technology departments, particularly in companies that put a specialpremium on security, love them too: life is fairly simple with a PC on every desk and a BlackBerry,connected to the corporate e-mail system, in every hand. And many youngsters, especially in Britain,have taken eagerly to BlackBerry Messenger (BBM), a free instant-messaging service. Less happily,politicians called for BBM to be shut temporarily during this summer¶s English riots, because somewere using it to organise disturbances.

But the smartphone business is changing²away from RIM. Not only a growing number of roadwarriors, but also their bosses, want to use their own smartphones rather than company-issuedBlackBerrys, and are increasingly allowed to do so. Apple¶s iPhone and the many Android-based

competitors boast many more apps, and are simply trendier. After this week¶s palaver, someBlackBerry owners may be tempted to treat themselves to the latest version of the iPhone, whichgoes on sale from October 14th. [See Appendix 1 for a comparison of smartphones]  

It has not helped that RIM was slow to get new products to market, although phones with a newoperating system are now appearing. The company is not only smarting, so to speak, in its corebusiness. It has also made a lacklustre entry into the tablet market, shipping 500,000 of its PlayBooksin its first quarter but only 200,000 in its second. Gartner describes its tablet operating system, QNX,as ³a promising platform´, and thinks RIM may sell 3m PlayBooks this year. But even if it managesthat, that figure looks puny next to forecast sales of more than 46m iPads and 11m Android-basedtablets.

Some BlackBerry customers sound remarkably forgiving. A ³small-business owner´ who took part inRIM¶s press conference on October 13

thsaid that he had intended to challenge Mr Lazaridis¶s

contention that services had been restored. Yet by the time he spoke his e-mails were flowing again.

³Thank you for all you¶ve been doing,´ he said.

Others may be less patient. Investors certainly are. RIM¶s share price has fallen by more than 60%since February. Whatever wonders its co-bosses, Mr Lazaridis and Jim Balsillie, have worked in thepast, two leaders now look as bad as none. Jaguar Financial, a Canadian investment bank, smellscomplacency. It wants a change at the top and in direction, perhaps even to break RIM into three: anetwork company, a device-maker and a holder of patents. It claims the support of the owners of 8%of RIM¶s shares.

Page 2: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 2/8

SM0374 Articles for Seminar 1: RIM/Blackberry 2 

Daily Telegraph, 17th

December 2011

Will BlackBerry survive 2012?

It seems that every month BlackBerry-maker Research in Motion has more bad news to announce. InNovember it paid a $365million charge for unsold PlayBook tablets; yesterday it announced thatcrucial new phones would now be delayed to the latter half of 2012, rather than being out by March.Co-CEOs Jim Balsillie and Mike Lazaridis charitably cut their pay to just a $1 each, but analysts and

critics argued they¶re still overpaid. One writer on the respected blog PaidContent blog said the pair should have been ³fired months, if not years ago´.

 At the heart of BlackBerry¶s problems lies its troubled transition to a new operating system: in order tocompete with the iPhone and with Google¶s Android phones, the Canadian company has had torebuild its software from the ground up. So far, the only product using a new version is theunderwhelming PlayBook. Yesterday, announcing RIM¶s results, Lazaridis delivered the bad newsalmost casually. The new OS will power a new generation of phone, but in order to compete RIM hadearlier changed its mind on which chips to use. Now he said RIM could not get enough of them andthat delays were unavoidable. Lazaridis compounded the disappointment for investors by cutting thefirm¶s prediction of sales to between 11 and 12 million smartphones in the current Christmas quarter,down from 14.8 million over the same time last year. Others companies¶ sales are rising at hisexpense.

Last month, analyst Ian Fogg said that ³if you look at RIM¶s track record they have a history of missing

launch dates; that doesn¶t bode well.´ He warned ominously that ³If they fail to ship quality productswe¶ll see a slow decline,´ and it would appear that Fogg¶s predictions are already coming true. Withrather dry understatement, however, Lazaridis said in a statement that "It may take some time torealise the benefits of the platform transition that we are undertaking, but we continue to believe thatRIM has the right set of strengths and capabilities to maintain a leading role in the mobilecommunications industry´. When he claimed that people tell him ³every day´ that BlackBerry is thebest communications device around, commentators immediately said he was listening to the wrongpeople.

RIM's share of the smartphone market in the US fell to 9.2 per cent in the third quarter from 24 per cent in the same period last year, according to research group Canalys. Increasing numbers of analysts across the board now find one conclusion inescapable: RIM doesn¶t just need customers ± itneeds a buyer.

Reuters, December 19th 2011

Could RIM's survival mean ditching the BlackBerry?

It might seem like corporate heresy but an increasing number of technology investors and experts areasking whether Research in Motion needs to ditch its BlackBerry handset business to survive. Theidea that is gaining favour, albeit only among a minority of shareholders, would see the Canadiancompany fully open its secure and highly respected network to rival smartphone providers andconcentrate on that business while getting out of the hardware game altogether through a sale.

Disappointing quarterly results, including a dismal outlook for Blackberry sales and word that RIMwould delay the introduction of new devices, sent its shares down more than 11 percent to their lowest levels in almost eight years on Friday. Just before those numbers were released, activistshareholder Jaguar Financial called on the company to sell its handset business and monetize i ts

patent portfolio while retaining the high-margin services business. "Jaguar believes that the road mapto value restoration lies in a sale of RIM whether as a whole or in separate parts," it said.

RIM's spidery, data-crunching network reaches behind corporate firewalls and taps into mobilenetworks globally. The network, unique among handset makers, has been a cornerstone of theBlackBerry's growth - wi th email and instant messages routed through RIM's own enterprise serversand data centres, where it is encrypted and pushed out to subscribers. There are no middlemen tointercept corporate or state secrets, or even the flirty chats of teenagers who love the free BlackBerrymessaging. [See Appendix 2 for more detail]  

Terminal Decline?

Page 3: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 3/8

SM0374 Articles for Seminar 1: RIM/Blackberry 3 

Jaguar, which claims support from shareholders who own about 8 percent of RIM's stock but onlyowns a tiny fraction itself, also reiterated its call for a change in the company's leadership. It hascalled for a new "transformational" leader to replace RIM's co-CEOs Mike Lazaridis, the company'sco-founder, and Jim Balsillie, the mercurial salesman who has marketed the BlackBerry to the world.It is not alone in wondering whether a sharp decline in Blackberry sales - the company said it expectsthe number of devices it ships in the quarter including Christmas will drop as much as 26 percent froma year ago - is a sign of terminal decline for the product.

The company's network has stronger margins and more secure recurring revenue, though it stillneeds to be fully exploited. "If they want to maintain that asset, if not stabilize or grow it, they need toopen it up to the other platforms and look at themselves as an enterprise software company,"ThinkEquity analyst Mark McKechnie said. RIM is likely already working on just such a change, saida U.S.-based shareholder, who declined to be identified. The fund manager, whose firm owns morethan 1 million RIM shares, said delays launching new software and devices may reflect efforts to fullyaccommodate devices from outside RIM's own stable.

 A year ago, talk of ditching the BlackBerry would have been almost unthinkable, let alone garner anyserious attention. That was before a spectacular meltdown that has seen the device, once anessential tool in the top echelons of business and polit ics, being pushed aside by Apple's iPhone andsmartphones powered by Google's Android software. The deterioration in the business has been sogreat that some analysts now estimate that RIM is barely making money on BlackBerry sales.

M assive Discounts

That isn't its only problem. The PlayBook, the company's latecomer in the tablet market dominated by Apple's iPad, has been a deflating disappointment, forcing RIM to offer massive discounts on theunloved device. It took a $485 million pre-tax charge for the Playbook, which runs on QNX softwarethat RIM plans to use in its future devices. The severity of RIM's problems shows up in its shareprice. It crashed to a low of just $13.12 on Friday, after trading as high as $144 in 2008 and about $70in February this year. A company that was once worth almost $80 bill ion is now valued at barely $7billion. Meanwhile, the subscriptions that businesses and network operators pay RIM each monthbrought in more than $1 billion in each of the past two quarters.

The company declined to comment on talk that it will ever abandon the BlackBerry and did not grantinterviews with either Lazaridis or Balsillie for this story.

Balsillie announced a comprehensive review of RIM's operations on a conference call with analystson Thursday. "We plan to introduce new devices into the smartphone and tablet market, as well as

products and services that better leverage our global cloud infrastructure, and unique capabilitieswithin the smartphone market, he said.

While RIM hasn't given any indication it plans to give up on its BlackBerry handset, it has started toemphasise its services business.

Extra Step

In late November, RIM took a first step that could eventually lead to establishing the network as astandalone operation. It introduced a software tool giving corporate customers the option of linkingiPhones and Android devices to the BlackBerry network. The move stops short of offering outsidersaccess to its unique technology that encrypts data and pushes it out to the BlackBerry. Going thatextra step is exactly what some critics suggest that RIM needs to consider. RIM charges a monthlyfee to every BlackBerry user, making its network a stable stream of revenue and giving the companyan advantage over every other handset maker. For RIM, it has become a more reliable source of profit than shipping its own smartphones.

The strategic reasoning goes: Why build a staid Volvo or a flashy Ferrari when you can own the tollhighway on which they drive? "There is a massive under-utilised asset in the services infrastructurewhich is very profitable. I think they are getting ready to come to market with a way to leverage that,"said the U.S. fund manager. "At a minimum, I think they are going to start aggressively doing thingsthat leverage their infrastructure beyond RIM handsets."

Risk in Waiting 

Mike Abramsky, an analyst at RBC Capital Markets, raised the prospect of RIM splitting in two back inJuly. For him, the biggest risk is waiting. He says RIM's still-growing global subscriber base gives ittime to make the move, but the network too would suffer if the BlackBerry keeps slipping. Alternative

Page 4: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 4/8

SM0374 Articles for Seminar 1: RIM/Blackberry 4 

networks that provide many of the same features as the BlackBerry enterprise network are alreadymaking inroads. Eventually even that jewel could lose its cachet, he says. "The risk in waiting is thatas more companies switch over to alternatives, it will be difficult to attract them back to BlackBerryeven as a network-only business," he said, referring to companies such as Good Technology andSAP's Sybase, which encrypt and manage data for iPhones and other devices. Abramsky saidoffering a managed network for users of all handsets would expand RIM's potential market by sixtimes or more. At the same time, the network business likely boasts an 80 percent gross margin

versus a handset business in the high 20 percent range.Lazaridis has been betting on reinvigorating the Blackberry by hoping that QNX, the new operatingsystem, will help RIM catch up and perhaps overtake the iPhone and Google's Android and stifleMicrosoft's emerging mobile platform. The new system is supposed to allow devices to be updatedon the fly and should also help third-party developers that struggle to write appealing apps in RIM'saging framework. A dearth of BlackBerry apps compared with Apple and Android has limited RIM'sattractiveness to many consumers.

But RIM has yet to show it can make the transformation successfully. The fi rst of the new generationof QNX-equipped smartphones - the BlackBerry 10 line - was initially promised for early next year, buton Thursday RIM said it did not expect to release a BlackBerry 10 device until the latter part of 2012.The delay in the make-or-break QNX line will only accelerate the drive among investors for sweepingchange.

What's clear to many investors and analysts is the status quo will mean an accelerating fade into

irrelevance. "Investors have been extremely patient and they're being asked to wait another year,"said a Canada-based shareholder. "A year from now, will all this be too little, too late?"

The Guardian, January 4th

2012

Research In Motion is reportedly close to a decision on stripping its co-chief executives of their other shared role as chairmen of the board, a change that could meet a key demand from angry anddisillusioned investors. The National Post newspaper, citing "sources familiar with events," saidBarbara Stymiest, currently an independent member of RIM's board, is leading the race to replace theco-founders Mike Lazaridis and Jim Balsillie in the chairmanship. RIM shares jumped more than 7%on investor hopes that the struggling BlackBerry maker was listening to increasingly strident demandsfor change.

 At the same time, the company has slashed prices of its PlayBook tablet in the US by up to $400(£255), offering all three versions of the product ± with storages of 16GB, 32GB and 64GB ± for thesame price of $299 until the finish of its current financial quarter at the end of February. That is adiscount of $400 against the original price when the device was first introduced in April 2011. But withRIM having taken a $485m writeoff against the value of PlayBooks in its warehouses in December,effectively writing down the value of 1.2m of the devices that it had to zero, it now profits if it can sellthem at any price. It has shipped roughly 850,000 of the devices in its first nine months.

The missteps over the PlayBook and delays to the introduction of handsets built on a new operatingsystem, now not expected until later this year, have intensified the focus on RIM's unusual boardroomstructure, where co-founders Lazaridis and Balsillie are both co-CEOs and co-chairmen. They arealso RIM's second- and third-largest shareholders, with a little more than 5% of the stock apiece."Any talk about an independent chairman is going to give this company a boost. It will increase thelikelihood the value of this company will be unlocked," said BGC Partners analyst Colin Gill is. "It

breaks the stranglehold the current CEOs and co-chairs have on the company." But other analystsdoubted Stymiest, if named to the chairmanship, would actually assume the transformational role thatactivist shareholders are calling for. Jaguar Financial Corporation, which says it speaks for 12 of thecompany's 20 largest shareholders and 8% of its stockholders, has been calling for some months for boardroom change including the splitting of the CEO and chairman roles.

The precipitous RIM share-price drop in 2011, which has seen it barely worth the value of its assets,prompted calls by some analysts and investors for RIM to consider strategic alternatives such as asplit or an outright sale of the company. Sources told Reuters in December that Amazon.com andother suitors had considered making a bid for RIM, but the board wanted to focus on a turnaroundinstead.

Page 5: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 5/8

SM0374 Articles for Seminar 1: RIM/Blackberry 5 

In June, RIM agreed to study its unusual corporate structure and report back to investors by the endof January. RIM did not respond directly to the National Post report, but said a committee of its sevenindependent directors was on track to deliver recommendations by 31 January. That committeeincludes Stymiest, who has sat on the RIM board since 2007 and who is one of Canada's mostsuccessful businesswomen. Analysts were not sure if Stymiest could herald the more radical changeactivist investors want if she took over as chair, or if such a change would just be more window-dressing at a company that has earned a reputation for over-promising and under-delivering. "She's

being thrust into the limelight to appease shareholders. It doesn't really do much for me personally,"said Matthew Thornton, an analyst at Avian Securities in Boston. "This one action doesn't solveanything, in my mind."

CNET, January 3rd

2012

There's still a lot to like about RIM. Seriously«.

Roger Cheng is a senior writer for CNET covering mobile technology. Prior to CNET, he was on thetelecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade.

OK, so I've been as hard as anyone on Research In Motion. But it's not all bad.

Sure, the company is burdened with a bloated management structure, leaders who in recent months just can't do anything right, and a trajectory that only seems to be headed further south. It's in thedoghouse with investors after losing more than three quarters of its market value last year. Moreimportantly, RIM's share in its home market of North America is slowly being ceded to Apple and Android.

But with all of the RIM bashing in recent months, it's easy to forget that despite its troubles, thecompany is actually on solid financial footing. Sure, its stock has tanked over the past year, but shareprice is a leading indicator, and not an accurate measure of the company's current financial position.

RIM, for all of its missteps, is still a company able to generate more than $5 billion in revenue andnearly $900 million in cash flow from operations in a quarter. It is a company with a clean balancesheet held down by little debt. It is a company that has a valuable stash of intellectual property at atime when owning the right patents makes all the difference.

In other words, maybe it's time to cool it with the BlackBerry-is-doomed talk.It's hard not to get sucked into that line of thinking when the constant flow of news is negative. On theheels of disappointing quarterly earnings last month, co-CEOs Jim Balsillie and Mike Lazaridiswarned that the first next-generation smartphone using BlackBerry 10 wouldn't hit the market until late2012. Earlier today, the company slashed the prices on its PlayBook, a further illustration of itsinability to move the failed tablet.

But a bit of positive news also trickled out today, with a report that RIM is preparing to name a newchairman and strip the title away from Lazaridis and Balsillie--a move that could bring a moreobjective view to the direction of the company.

Here are some other positive points to consider: BlackBerry's brand, which may have lost its luster abit in the U.S., is still strong overseas. Much of its growth is coming from the emerging markets, wherephones admittedly are of the lower-end variety. One of the primary drivers of that popularity is theheavy use of its BlackBerry Messenger service, which further drives adoption.

So despite the doom and gloom surrounding the company, RIM's subscriber base actually grew 35percent over a year ago to 75 million users in the fiscal third quarter. And while the 14.1 millionBlackBerry devices it sold in the period was a slight decrease from a year ago, it's still an impressivefigure that puts it up in the same stratosphere as the top smartphones manufacturers. In comparison,market leader Samsung Electronics shipped 27.8 million units while Apple shipped 17.1 millioniPhones, according to Strategy Analytics.

RIM also has a collection of intellectual property that still gives the company additional value.Between its applications and granted patents, it has the largest portfolio out of all of the major technology companies, according to a study by MDB PatentVest. Intellectual property is at a

Page 6: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 6/8

SM0374 Articles for Seminar 1: RIM/Blackberry 6 

premium after Google agreed to buy Motorola Mobility for $12.5 billion, largely for its patent portfolio,and a consortium of technology companies--including RIM--paid $4.5 billion for patents purchasedfrom bankrupt Nortel Networks. Sanford Bernstein analyst Pierre Ferragu estimates the company'spatent portfolio could be worth $3 billion to $4 billion. The company currently has a marketcapitalization just above $8 billion.

RIM's assets are worth enough to garner interest from a number of companies, from Amazon toMicrosoft and Nokia. While I still don't think either combination would have had a legitimate chance,

the perceived value those companies saw in RIM is real.

Clearly, RIM has a ton of challenges ahead of it. As an investment, the stock is a bad bet. But it 's tooeasy to forget that the company has built up a position of strength that it won't be letting go of anytime soon.

RIM may still end up crashing eventually, but I wouldn't count it among the walking dead yet.

Appendix 1 ± Comparison of Smartphones

InfoWorld, January 4th

2012

iOS 5, Android 4 "Ice Cream Sandwich," Windows Phone 7.5 "Mango," and BlackBerry OS 7 were allreleased in the past few months, each promising to advance the iPhone, Android smartphones,Windows Phones, and BlackBerrys respectively to the head of the mobile pack. But only one can bethe best.

InfoWorld has tested each of the major mobile OSes on the flagship devices for each OS to see whatthe best smartphone is for business and professional users. The answer is without a doubt the iPhone4S, thanks to iOS 5, the Apple ecosystem, the smartphone's solid hardware, and the new Siri voice-controlled "intelligent" assistant. But as good as the iPhone 4S is, it does not beat the competition inevery respect, showing it has room for improvement and that Apple doesn't excel at every aspect of modern mobile computing.

H ardware

The Galaxy Nexus's 4.65-inch Super AMOLED screen gets the oohs and ahhs -- the samephenomenon you see at a Best Buy as people drool over the 70-inch HDTVs. But the SamsungFocus S's 4.3-inch screen boasts the best size of the bunch -- it makes the iPhone 4S's 3.5-inchscreen feel cramped. The Galaxy Nexus's support for 4G cellular networks places it as the winner inconnectivity, though 4G penetration is quite low; this capability matters little now, but it will becomemore relevant as the year progresses.

But the iPhone 4S wins on every other hardware count. It has a very fast processor, wired andwireless video-out capabilities, low-power Bluetooth, a high-density Retina display, the highest-qualityrear camera, strong battery life, a worldphone-capable 3G radio, and a high-quality aluminum andglass bezel. (The BlackBerry 9900's bezel is of equally high quality.)

The lowlights of the hardware for today's flagship smartphones are the puny 8GB of RAM in theBlackBerry Bold, the flimsy, tacky back cover of the Galaxy Nexus, and the BlackBerry Bold's poorlyplaced camera button.

Business connectivity 

The iPhone has the best, most desktoplike business connectivity of the bunch, with the best supportfor Microsoft Exchange and IMAP email, the richest message capabilities, and the easiest-to-usecalendar. But competitors exceed the iPhone's iOS 5 in some areas. For example, the GalaxyNexus's Android 4 has a better mechanism for navigating multiple accounts, and the BlackBerry isunchallenged in its support for sophisticated repeating-event patterns.

Lowlights include iOS's inability to work natively with zipped attachments, iOS's inability to creategroups of contacts, the BlackBerry's awkward time-stamping of messages received when offline, andiOS's poor integration of social networking.

Page 7: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 7/8

SM0374 Articles for Seminar 1: RIM/Blackberry 7 

 Application support 

This category is one where the iPhone 4S shines the brightest. Not only does the App Store have ahuge array of useful, richly capable apps (in addition to the junk found in all app stores), but the entire Apple ecosystem -- AirPlay, iCloud, and iTunes -- makes it oh-so-easy to bring an iPhone into your whole computing context, especially if you use a Mac. The iPhone also has the best control over location information usage, providing the most user privacy of the bunch. It also offers more usefulcore apps than the rest, such as with its Notes and Reminders apps, and has one-upped Android's

notifications capability with a better approach.

The iPhone 4S takes all these iOS 5 advantages and adds the Siri voice-based personal assistant tothe mix. Siri is simply amazing, despite its beta status. You can actually talk to your iPhone and haveit understand much of what you are asking and saying. Its voice recognition, both for dictation andinteractive queries, is unmatched by the other voice-capable platform, Android, whose once-heraldedvoice search and dictation features suddenly feel primitive. Windows Phone 7.5's voice search is theleast accurate, and it offers (inaccurate) dictation only for sending text messages.

 Apple has consistently made its OS upgrades work with devices produced in the previous two years,ensuring both a more coherent ecosystem and rewarding customers' investments in its platform. Bycontrast, Android devices are rarely upgraded to a new OS, even those that come out mere monthsbefore an OS upgrade, as has become painfully clear in Android 4's recent release. Likewise, RIMorphaned existing BlackBerry users when its new models came out last summer, and the companysays these new models won't run the BlackBerry 10 OS expected late this year. Would-be Android

and BlackBerry buyers thus should think twice.

The other lowlights for application support are the BlackBerry's poor app catalog and generally clunkycore apps, Windows Phone's primitive (and embarrassing) Office apps, Windows Phone's very poor voice recognition in its voice-command interface, and Google's malware-laden Android Market. Anddarts to Apple and RIM for promoting messaging and, in the case of iOS, videoconferencing apps thatwork within only their own platforms.

Web and Internet 

If HTML5 support matters in the websites you access, no mobile browser works with as many aspectsof the still-evolving standard as Apple's Safari. In second place is, surprisingly, BlackBerry OS. Android 4 is in third place, and Windows Phone is far behind. Safari also does better than the other browsers when accessing AJAX-oriented websites, though it's not as yet up to the level of desktopbrowsers.

Safari also has two very handy browser capabilities that keep it ahead of the pack: the Reading Listfeature for temporary bookmarks and the Reader feature for simplified Web page display. But Safariisn't always the best mobile browser; Android 4's Chrome browser and Windows Phone's InternetExplorer provide a handy option to request a desktop page rather than the not-always-optimal "mobileoptimized" page many sites serve up to smartphones.

There are just a few lowlights on this category. One is Android 4's inability to properly render someWeb pages or to identify itself as either a smartphone or tablet to many websites. Another is iOS'spoor support for social network sharing of Web pages. Finally, there's Windows Phone'sembarrassingly poor HTML5 compatibility.

Usability 

The iPhone's iOS has the most consistent and intuitive user interface of the bunch, augmented by therichest set of gestures and accessibility controls. As an example of that user-friendly approach, when

you select text in iOS, the area you are tapping and holding is magnified, so you can more easily seewhere you are putting your text cursor. And there are often quick-access shortcuts for frequentactions, such as the quick flick to reveal the Delete button on emails in the message list. The ability toset custom vibrations, not just ringtones, is another example of thinking about the user in multiplecontexts. Then there's the ability to create your own text shortcuts that work everywhere.

Siri offers iPhone 4S users a whole new dimension of usability beyond what iOS 5 offers all other iPhone and iPad users.

Still, Windows Phone's slick UI is intuitive, though its scrolling approach does get tedious once youhave more than a few of whatever -- apps, contacts, messages -- to navigate. Android 4's resizable

Page 8: RIM and Its Troubles (1)

8/3/2019 RIM and Its Troubles (1)

http://slidepdf.com/reader/full/rim-and-its-troubles-1 8/8

SM0374 Articles for Seminar 1: RIM/Blackberry 8 

widgets are very handy for getting quick but useful detail on your social networking feeds, email, andother such frequently updated information. iOS's notification facility only partially satisfies that need.

When it comes to lowlights, the lowest of the low is the overall BlackBerry experience, a painfulmishmash of DOS-like screens, early-Windows-like menus, confusingly obscure icons, and partial useof touch. A close second is Windows Phone's unreadable text, caused by a deadly combination of small size and low-contrast colors.

Security and management The BlackBerry has the greatest degree of security and management, but it requires the use of theextra-cost BlackBerry Enterprise Server (BES), and many of its security settings require ITintervention. It's a Pyrrhic victory. Without BES, the BlackBerry is even less secure and manageablethan Windows Phone 7, though BlackBerry OS supports VPNs, whereas Windows Phone 7 does not.

iOS comes in second after the BlackBerry, with core security capabilities manageable directly fromMicrosoft Exchange and extended controls manageable through mobile device management (MDM)tools. iOS 5's new support for the S/MIME email security protocol and other MDM extensions improveon the iOS 4 capabilities that f inally made the iPhone acceptable to many IT organizations. Android 4has improved significantly in this area, leaving Windows Phone 7 the only mobile OS that can't haveat least moderate security and management applied to it.

Looking forward to 2012 improvements It's clear that the iPhone 4S is the best smartphone overall, atleast today. But there's room for improvement in the iPhone, as there is in the other mobile platforms.

Appendix 2 ± Blackberry Network Infrastructure

 Adapted from Wikipedia (but checked!!)

BlackBerry Enterprise Server 

BlackBerry smartphones can be integrated into an organization's email system through a softwarepackage called BlackBerry Enterprise Server (BES). Every BlackBerry has an ID called a BlackBerryPIN, which is used to identify the device to the BES.

BES acts as an email relay for corporate accounts so that users always have access to their email.

The software monitors the user's local Inbox, and when a new message comes in, it picks up themessage and passes it to RIM's Network Operations Center. The messages are then relayed to theuser's wireless provider, which in turn delivers them to the user's BlackBerry device.

This is called push email, because all new emails, contacts, task entries, memopad entries, andcalendar entries are pushed out to the BlackBerry device automatically and instantaneously. Inaddition, BES provides network security, through encryption of all data that travels between theBlackBerry handheld and a BlackBerry Enterprise Server.

BlackBerry Internet Service

The primary alternative to using BlackBerry Enterprise Server is to use the BlackBerry InternetService. BlackBerry Internet Service, or BIS is available in 91 countries internationally. BlackBerryInternet Service was developed primarily for the average consumer rather than for the business

consumer. BlackBerry Internet Service allows POP3 and IMAP email integration for an individualpersonal user. However, the integration features only one-way synchronization; changes to messageson the device are not reflected back to the email server. BlackBerry Internet Service allows up to 10email accounts to be accessed, including many popular email accounts such as Gmail, Hotmail,Yahoo and AOL. BlackBerry Internet Service also allows for the function of the push capabilities invarious other BlackBerry Applications. Various applications developed by RIM for BlackBerry utilizethe push capabilities of BIS, such as the Instant Messaging clients, Google Talk, Windows LiveMessenger and Yahoo Messenger. Social Networks Facebook, Myspace and Twitter's notificationsystem is accessed through BIS, allowing for push notifications for them.