When Research In Motion Ltd.'s Mike Lazaridis introduced Microsoft Corp. head Steve Ballmer during a speech in Orlando on Tuesday, few in the audience could say they saw it coming.
RIM and Microsoft are direct competitors and rivals. Both companies are fighting for a slice of the growing smart-phone market - RIM with its mobile devices and Microsoft with its Windows Phone operating system. The U.S. tech giant, in fact, has just formed a major partnership with Nokia that both companies hope will lead to attractive phones that steal some of RIM's customers.
And yet here were Mr. Lazaridis and Mr. Ballmer, smiling on stage together.
The announcement itself - that from now on, BlackBerry phones and tablets would come preloaded with Microsoft's Bing search engine - was not earth-shaking. But it was the context that mattered. The day before, RIM had unveiled a new software tool designed to help corporate IT departments manage their companies' smart phones wirelessly, with an important new feature: It could also be used for managing smart phones built or powered by RIM rivals Apple Inc. and Google Inc.
For RIM, it was a tacit admission of the gains that the competition, in particular Apple, have made in a market once monopolized by the BlackBerry - the corporate and government market. That is perhaps the most significant development to come out of this week BlackBerry conference, now in its 10th year. With the loss of its dominance, RIM's approach seems to have shifted, and the company is opening itself up to the idea that it needs more partnerships and alliances to thrive.
"It's a positive that they're offering these tools," said Colin Gillis, director of research and senior technology analyst at BGC Financial. "It's a negative that the market has shifted and necessitated this change."
For RIM, the new software comes with potential risks and rewards. On one hand, it may give some companies more incentive to purchase devices other than BlackBerrys. On the other hand, should companies buy non-BlackBerry devices anyway, at least they may still use RIM's software to manage them, giving the smart-phone maker a foothold in the corporate space even among businesses that aren't purchasing its hardware.
Much of RIM's power as a mobile device maker comes from two things: the technical infrastructure it built to support the BlackBerry network, and the company's massive user base, which now stands at about 60 million. Indeed, this year's annual BlackBerry conference had the largest attendance to date, with more than 5,000 people taking part.
But in terms of growth, especially in North America, some numbers are troubling. According to comScore, RIM's BlackBerry operating system is no longer the top smart-phone platform in the United States, having been surpassed by Google Inc's Android-powered phones.
It is difficult to compare the two, since RIM is the only company manufacturing BlackBerrys, whereas multiple firms make Android-powered phones. But according to comScore, Android phones experienced a six-percentage-point increase in market share in the U.S. between December of 2010 and March of 2011, and now represents 34 per cent of the market. During the same period, BlackBerrys lost 4.5 points, to 27.1 per cent. (Apple has 25.5 per cent.)
Nonetheless, RIM remains the manufacturer of choice for the enterprise smart-phone market, even as Apple and Google experience tremendous growth among consumers. But device exclusivity in the corporate world is quickly coming to an end, as more IT departments offer a choice of phones, or even allow employees to use their own devices for work purposes.
At RIM's annual conference, all signs suggested the company is aware of that shift, and is attempting to get ahead of it through a strategy that combines strategic partnerships and new products. In addition to the phone management software, RIM also introduced a tool called BlackBerry balance, which essentially splits a device into two gated sections, one for personal use, and one for business. The software is designed to let users enjoy apps, games and other consumer services without risking the security of their corporate data and software - essentially, RIM is attempting to give users two mobile devices in one.
At the same time, RIM's increased willingness to look outward for potential partners reflects the company's attempt to fix some of its real and perceived deficiencies as quickly as possible. Last month, RIM announced it will let users of its PlayBook tablet run applications originally designed for mobile computers running the Android operating system - a move that will immediately expand the number of apps available to PlayBook users by several hundred thousand. As it did with Adobe during the development of the PlayBook, RIM is now partnering with Microsoft to put Bing on BlackBerrys in large part because the two companies share common enemies - namely, Google and Apple. Microsoft was likely interested in the partnership because Google dominates the mobile search market, whereas Adobe was eager to help RIM design its new tablet because Apple's mobile devices won't play multimedia designed with Flash, an Adobe product.
But perhaps the most important development to come out of RIM's annual conference is the company's attempt to position itself as a central cog in the field of enterprise smart-phone management, even if the smart phones those enterprises are using aren't exclusively BlackBerrys any more.
"[The new management software]allows RIM to grow with the market no matter which way it goes," said Ameet Shah, managing director for business development at Toronto-based app developer Five Mobile Inc.
"In a way, they're protecting themselves."Report Typo/Error