RIM announced their next generation handset and operating system on Tuesday, and it appears to be a good compromise to appease the two separate markets for BlackBerry smartphones, consumers and enterprise users. The Torch comes at a critical time for RIM. While they can still claim the number one position in the US smartphone market, it is no secret that their preeminence is being challenged by Apple’s iPhone, and more pointedly of late, by the growing Android population.
RIM is indeed treading a challenging path in maintaining its traditional enterprise customers while expanding in the consumer space. While everyone associates RIM with the enterprise customer, for the past few years, better than 50% of their sales (and most of their growth) has come from consumers. RIM is clearly holding to that slippery middle ground by adding features that appeal to consumers while not alienating or abandoning those core enterprise users.
The Torch's basic design combines a touch screen with a slide out QWERTY keyboard, and equips the device with a new operating system aimed at sprucing up RIM’s lackluster web browsing experience. At 3.2-inches, the screen is a little smaller than the iPhone’s 3.5-inch display, and cannot match Apple's eye-popping Retina Display technology. RIM’s first two attempts at the touch screen, the Storm and Storm 2, were only moderately successful (to be polite) and they did abandon the "clickable screen" feature on the Torch.
On the software front, the Torch is the first device to support the BlackBerry 6 operating system, which delivers a more iPhone-like user experience than the Storm. The Web browser has improved considerably to the point where it may finally be deemed "adequate". They've also added a new feature that allows a user to sync with iTunes or Windows Media Player wirelessly over a home Wi-Fi network. The feature doesn't work with Macs as yet.
It goes without saying that RIM will maintain their traditional security profile and the BES server for excellent application synching and device management to keep those enterprise IT departments loyal. In the meantime, RIM's legendary security is getting them into trouble with Saudi Arabia and the UAE, where the governments want to be able to monitor BlackBerry emails and text messages (i.e. BBMs).
So what impact will the Torch have on the overall market? That depends a lot on where the user is starting from.
* iPhone Users: iPhone users are a type--if they’re switching, it’s to an Android, not a BlackBerry. Steve Jobs is sleeping soundly tonight.
* Android Users: Most Android users have just gotten their devices so they are not likely to switch until their contracts run out. Also, they are on that euphoric upswing that comes from riding the next big wave where things are good now and will only get better.
* RIM Enterprise Users: On the enterprise side, despite user pressures to support iPhones and other consumer-oriented smartphones, most IT departments are holding steadfast to BlackBerry. Those IT managers are hoping the Torch will offer enough pizzazz to quiet the iPhone throng, at least for a while. In the meantime, they'll have to address the iPad throng.
* RIM Consumer Users: This is the group it will be most critical for RIM to maintain. RIM still has "solid and dependable" going for it, but the Torch just doesn’t pack the same wallop as an iPhone or an Android. Many of those RIM consumer buyers have had their devices for a few years and will be sizing up the market. Defections from that quarter could put a real dent in RIM's growth curve.
* Non-Smartphone Users: Most people forget that only about 20% of US cell phone users have smartphones, so the big question is, what will the new smartphone users choose? Many of them have moved up to texting phones, but more and more are being drawn to the full mobile web and applications experience. My bet is that with the Torch, RIM will fall a distant third behind Apple and Android (not necessarily in that order) in attracting those new smartphone users.
In any event, people love mobility and every smartphone announcement is an event. Where the iPhone 4 launch was like Mardi Gras, the Torch announcement was more like cake and an accordion player at the Senior Center.
