The hype for BB10 has got everyone excited; that much is no question. But are investors failing to think thoroughly? Or has the anticipation convinced everyone to commit a little bit of confirmation bias? I will address three points that should convince RIM (RIMM) lovers that BB10 might very well be the giant disappointment everyone is hoping it won't be.
1. It will be a "bleeding-edge" OS at a time when Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android feel so, so comfortable.
More and more mobile users are making the switch to smart phones, and you know what company's name they're not screaming? You guessed it: RIM. The younger generation is quickly forgetting what a blackberry is and even adults are getting used to the fantastic luxuries and novelties that only iOS and Android have been effectively offering to consumers. The mature, business-savvy feeling that BlackBerry users once flaunted has degraded to an embarrassment around their friends sporting iPhones and Samsung Galaxies. BB7 did not keep up with the competition; unfortunately for RIM and its shareholders, the odds are against the chance of a successful re-launch.
Apple's ability to commoditize a premium technology is an almost artistic and frightening approach to upgrading minimum standards. iPhones (4, 4S, or even 5) are more affordable than ever, and it seems people have been more than happy to pay for what Apple has to offer. To even stand a chance against Apple, RIM's BB10 has to match or beat Apple's iOS despite the upper hand it clearly holds.
Apple's Advantages: Culture-driven; established Apple cult; powerful and proprietary OS; massive and junk-free App Market; quickest integration with iPods and iPads (two other Apple leaders in parallel technology industries); popular design and aesthetics; noted Apple support and customer care. (add more in the comments if you can!)
As a response, Google did the right thing with Android and facilitated a cheaper, open sourced platform for a lot of the indulgences that the iPhone began pumping out. This is where RIM dropped the ball. Had RIM fought for market share with Android early on, its survival would have been possible, but now it's too late. Android is exploding all over the world, and its versatile and easy-to-use nature has supported and continues to support phone and App sales in staggering volumes.
Google's Advantages: Highest volume of phones sold; cross-OEM coverage; open-sourced; range of quality (equates to UI/UX-versatility); increasingly successful Google Play App market. (add more in the comments if you can!)
2. An immature BB10 app-market will continue to "turn-off" consumers and developers alike.
This doesn't need a lot of explaining. Applications are one of the factors truly at the heart of the success behind smart-phones. RIM is the most embarrassing contestant in this sense, and it's highly, highly unlikely that they will either make as efficient and clean of an app-store like Apple or even create a giant volume of an assortment of applications like Google Play.
Lead iOS and Android developers take their skills and find jobs paying competitive salaries. There is an engineering drought in this country, and it's more than laughable that RIM announced their plan to pay freelance developers $100 per app to get their market off the ground. It's truly a painful thought that they are willingly spending money to push a dead car up-hill.
Analysis of the ZDNet report shows that Google made up to $170M dollars in 2011 from their app market. Considering the millions of transactions that make place every day through iPhone (and iPad) apps, and Apple's 30% claim of in-app revenues, they are left with a pretty penny as well. These numbers are not likely to go down for either company. RIM's attempt at a newfound BB10 app-market will likely have beginning novelty, but is not likely to sustain growth and may be THE giant pitfall in their and their investors' hopes for a successful OS.
3. Enterprises are very likely to continue supporting "bring your own device" [BYOD] policies.
On Jan 22, Good Technology, a leader in secure enterprise mobility, released its results for the 2nd annual BYOD survey. Long story short, the good news is that the vast majority of enterprise companies support or have plans to support a BYOD policy; this means more convenience, more comfort, and less hassles. The bad news is that the one great thing that RIM did (hook enterprise deals) is now a dying need. Once again, the BlackBerry is no longer "cool" and it certainly no longer feels like a "company perk".
As enterprises begin to realize the mobile market is ready to offer cost-effective and operationally viable phones to their employees, they begin to see less of a need for mandated company deals with companies like RIM. While I personally believe that this is a progressive and much-needed philosophy, the good folks at RIM balk at the thought of slowly losing all their precious enterprise deals.
They recently released their device management system, BES10, to Gov't and Corporate Clients. Their online announcement sports a rather unattractive and generally unimpressive description of some of the new features that this segment of the long awaited OS will provide. One particular bulleted point stands out:
"BlackBerry® World™ for Work, the new corporate app storefront for BlackBerry 10 smartphones that allows organizations to easily manage apps for employees. Administrators can push and install the organization's mandatory apps to both corporate and personal-owned devices and publish recommended apps to employees."
The reason this bullet is exceptionally upsetting is that it reveals that BB World for Work hopes to tackle the BYOD problem by allowing admins to "push and install" mandatory apps to various devices, including personal ones. While the strategy itself is mildly unsettling, it goes on to prove that RIM is aware and likely shaking at the thought of the future of personal phone usage within enterprises. It may be too soon to tell how well they will do, but its safe to say that they have many more hurdles to jump before they're "in the clear."
The Bottom Line
Please do not blindly support the RIM bandwagon just because. They have made several fundamental and time-sensitive blunders and that leaves them to be unlikely underdogs in the wars on the mobile-front. On one hand, they cannot and will not uproot the iOS fan boys and fan girls because of socio-cultural vice grip that Apple has on the mobile market. And on the other hand, Google fights a strong fight with their competent and increasingly popular Android OS. RIM may be ruined simply because there's no need for it. People are absolutely in love with the currently trending platforms and a more sensible resolution is in order.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.