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What If RIM Licenses BlackBerry Software To Other OEMs

According to the latest speculation doing the rounds, BlackBerry maker Research In Motion is all set to license its software to other handset original equipment manufacturers, including Samsung and HTC, reports BGR. Citing analyst firm Jefferies & Co.’s Peter Misek, who had also confirmed reports of the company replacing Mike Lazaridis and Jim Balsillie from the co-chairman position, with board member Barbara Symiest, the report indicates that RIM has agreed to license its QNX based new operating system, Blackberry 10 to Samsung, HTC, and possibly others. In a note, Misek has said,” We think some of this has already been started with RIM likely agreeing to license Blackberry 10 to Samsung, HTC, and possibly others.This would help create a critical mass for the ecosystem and maintain RIM’s monthly service revenue; however, it puts more pressure on the hardware business in the short term. Longer term, it possibly gets people hooked on the RIM ecosystem and may in fact allow them to sell more BB 10 handsets (if they are able to create compelling handsets).”

So if this turns out to be true, won’t it hamper the company’s own prospects in the hardware business? Or does it mark a shift in the company’s position from being an integrated device maker to software and solutions play, as was evident in the recent launch of the Fusion Device Management Suite, which allowed enterprise customers to manage multiple devices including mobile phones and tablets running Apple’s iOS and Google’s Android operating systems, in addition to BlackBerry devices, from a single console.

– Firstly, RIM has been facing criticism over the recent years, for not being able to upgrade the Operating System on its mobile phones to match up to the levels of Android and iOS, the two major smartphone platforms that have taken over the market, with a growing device and developer ecosystem in place, to support them. Although RIM still maintains a dominating position in corporate environments thanks to its enterprise e-mail solutions and secure messaging services, it’s losing out as the others bring in more enterprise centric features. Microsoft’s WP7, which has a very small marketshare at the moment, is also expected to pose a serious challenge as it integrates Microsoft’s enterprise products including Exchange, Outlook, Office, Sharepoint, Lync and others, specially with Nokia as a dedicated hardware alliance partner.

– The analyst categorically mentions that RIM wants to license BlackBerry 10 and does not indicate that it would be limited to its messaging/e-mail stack. RIM was already offering BlackBerry Connect on Symbian and Windows Mobile based phones including on phones made by Nokia, Sony Ericsson, HTC and others that allowed them to access BlackBerry’s email service. But of late, no new device is featuring it. This is also because new BlackBerry handsets are available across all price points, and now feature multimedia capabilities as well, unlike old times when they were more of a work device.

There were rumours of RIM making its BBM (BlackBerry Messenger) messaging platform available, albeit in a limited way, on other mobile OS platforms, but we’ve not seen any new development in that direction, and these were quashed by a company executive. So, we assume that it might license the entire OS, continue making limited devices, and earn through licensing costs and service revenues.

– RIM acquired QNX, and implemented it on its tablet device, the PlayBook. The OS received good reviews for certain features and its multi-tasking abilities, but the tablet flopped because there were no apps to support it, unlike Apple’s iPad which was a big hit due to that one very reason, along with the availability of content such as music, videos and e-books. Moreover, the PlayBook could not perform basic PIM tasks, e-mail and messaging without being connected to a BlackBerry phone with BIS/BES, which was something that was expected to be present out of the box from a device coming out from the RIM stable. The company failed to understand that a tablet (even a phone) was not just a device to browse the web, it has to be supported with a strong content eco-system.

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RIM was expected to launch new phone devices based on the same OS, BlackBerry 10 in early 2012 but delayed it to the later half, saying that it could not get enough chips for its new phones. The buzz is that it has not been able to implement BES (BlackBerry’s enterprise service) on the new OS, without which it would not gain acceptance in the corporate segment, and hence the delay. However, its shares crashed and disappointed analysts, even further. The company has to seriously pull up its socks to attract more developers to develop apps for the new platform.

– So if it licenses the new OS to device manufacturers such as HTC and Samsung, which already make Android and Windows Phone 7 devices, RIM will be able to broaden its horizon. Of course, it would lose hardware exclusivity but will be able to financially secure itself with income from licensing and monthly service revenue from its BIS/BES products. Also, HTC and Samsung will be able to offer scale and cost efficiency in hardware production, with their facilities in Asia.

But the big question is why would these OEMs invest in RIM’s platform at a time when it’s on the loosing end? Both HTC and Samsung lead the pack when it comes to Android devices. They are also investing in Windows Phone, though in a limited way. Of course, the enterprise segment is lucrative, but a new untested OS with no established eco-system except of RIM’s messaging legacy, would be hard to peddle.

If RIM really wants to become a mobile software and solutions player, it has to widen its ecosystem and not just focus on e-mail and messaging, but extending it to apps and content.


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